Reports: Royal Ahold to acquire Ukrop’s stores
NEW YORK Rumors that Ukrop’s was on the sales block seems to finally have come to fruition. And with Ahold being the acquisition partner, this may mark a resurgence of Ukrop’s, known for its close community ties, in its core Virginia markets.
It also may mark a change in two cultural touchstones that helped define Ukrop’s position in its markets — Ukrop’s supermarkets were closed on Sunday and did not sell alcohol. And while the reasoning behind those decisions may be virtuous, the fact remains that in a toughening economy convenience and value become paramount to the consumer, and that conceivably gave a leg up to Ukrop’s competitors who fielded Sunday hours and beer and wine offerings throughout their aisles. Accordingly, Ukrop’s under Ahold’s guidance will soon entertain Sunday hours. Beer and wine sales is expected to be folded into the store’s mix in the next couple of years, once the Ukrop banner is taken down.
The deal also represents a resurgence of sorts for Ahold, suggesting that the Dutch grocer has completely recovered from the financial scandal that roiled its ranks just a few years ago.
In keeping with an Ahold resurgence, many analysts predict that Ukrop’s will be the first of many acquisitions made by the Dutch grocer as it expands its presence into North America. Ahold currently has more than $3.7 billion in liquid assets, and has repeatedly said that a down economy affords numerous takeover opportunities.
Ahold is currently the No. 14 pharmacy retailer in the U.S., with more than $2 billion in prescription sales through 2008, and the No. 4 supermarket pharmacy retailer. According to analysts, Ukrop’s generated approximately $550 million in annual sales. If Ahold is able to replicate pharmacy sales of 9.4%, that would mean an accretive $51 million in prescription sales with more to come through future acquisitions.
Report: Price Chopper may acquire Penn Traffic stores
NEW YORK The Penn Traffic Co. may have found a buyer for some of its stores, according to published reports.
Price Chopper, based in Schenectady, N.Y., is bidding $54 million for 22 of Penn Traffic’s P&C Foods stores, in upstate New York, Pennsylvania, Vermont and New Hampshire.
After defaulting on its debts, Syracuse, N.Y.-based Penn Traffic announced in November that it would file for Chapter 11 bankruptcy protection and sell off its assets, including all of its 79 stores, which operate under P&C, Bi-Lo Foods and Quality Markets banners.
Rite Aid reports losses in Q3
CAMP HILL, Pa. Rite Aid on Thursday posted a net loss of $83.9 million on revenues of $6.4 billion for the third quarter ended Nov. 28. Revenues declined 1.8%, primarily as a result of store closings and a decline in front-end same-store sales, the chain stated.
Same-store sales for the quarter decreased 0.5%, consisting of a 2.5% decrease on the front end. Both pharmacy same-store sales and the number of prescriptions filled continued to increase by 0.4% and 1.5%, respectively.
“Our results demonstrate the significant progress we’ve made to strengthen our company since last year’s third quarter,” stated Mary Sammons, Rite Aid chairman and CEO. “Liquidity at the end of the quarter more than doubled, and we’ve refinanced all of our 2010 debt maturities to give more time for our growth initiatives to work.”
Heading into the 2009 holiday season, liquidity totaled $903.2 million of availability from the company’s credit facility and invested cash.
Adjusted EBITDA for the quarter was $254.2 million, or 4% of revenues. Prescription sales accounted for 68.6% of total drug store sales, and third-party prescription revenue represented 96.2% of pharmacy sales.
In the third quarter, the company opened 3 stores, relocated 13 stores, remodeled 3 stores and closed 14 stores. Stores in operation at the end of the third quarter totaled 4,801.
Rite Aid also announced into an extension of its pharmaceutical supply agreement with McKesson Corp., which was completed Dec. 10. McKesson will continue to supply Rite Aid with primarily all of its branded drugs, some of its generic drugs and specialty pharmaceuticals through April 1, 2013.