The Sound of a Piano Dropping

Yes, that was a piano falling. From about the fourth story, I should think. And it’s the musical accompaniment to the year that is ending today. The year ended with a thud when we received notice that the Albertson’s LLC chain will move from Source Interlink to The News Group effective April 2014.

In some ways this means not very much. The copies shift from one warehouse to another. A different colored truck makes the delivery. The credits go to a different line on a worksheet.

But for the local Chicago warehouse, where we have already lost  over 75 Dominick’s stores as Safeway closed that banner of their chain this month, more losses will mount. As for Safeway, to date only 11 stores have been picked up and will be re-branded by the Marianos division of Roundy’s. Mariano’s is a high-end chain with small mainlines and not an enormous amount of checkout space. The rest of the stores are awaiting word on whether or not someone else picks them up. It’s possible that most of them will be re-opened because in the Chicago marketplace we have many small regional grocery chains. From what is out in the news, some have expressed interest but so far no commitment that I am aware of.

In the meantime, a big hole in our sales.

It also means that the primary traditional grocery chain, Jewel/Osco, moves to News Group and will no longer be serviced by a Chicago magazine wholesaler.

This is clearly TNG’s “push back” on Source snatching national contracts for CVS and Rite Aid. It doesn’t match the volume, but it is interesting to see. You have to wonder: What’s next?

If you’re a Chicago “veteran” like myself, it’s shocking to see the former Dominick’s chain disappear. It’s equally odd to contemplate the thought of a long-established chain like Jewel/Osco moving to another magazine distributor.

This is clearly an announcement to anyone in this business that if you’re not willing to adapt to all of the market changes that have accumulated over the years, a piano will surely be dropped on your head.

6 Replies to “The Sound of a Piano Dropping”

  1. Joe, Jewel/Osco is owned by Super Valu ?? I know they are a spin off of Albertson’s, but not sure there is any affliation today. ?   Jewel already has taken over 4 Dominicks as of this week, and the FMI said they are looking at 15 more. Also heard Whole Foods is taking over either 5 or 7 in the SW burbs.

    1. S/V sold the Jewel division to Cerebrus Mgmt in Jan of this year – they own Albertson’s. I also heard about the Jewel stores & Whole Foods. There are a lot of rumors out in the wind: Sunset and Treasure Island taking on some stores, Heinen’s from Cleveland coming in and expanding it’s footprint beyond their test store in Barrington. We’ll see.

  2. A former Source employee mentioned in August 2012 that Supervalu would sell the majority of it’s chains to Cerberus, the owner of Albertsons LLC . At that time the employee also mentioned that TNG would take the Jewel-Osco business from Source, and possibly pursue other Albertsons LLC chains afterwards.

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