During the past week, rumors have been circulating that Ukrop’s Super Markets was considering a deal to sell its 28 stores to another retail-grocery chain. This afternoon, there appears to be some more weight to the rumors as Food World, a Maryland-based grocery-industry publication, reports that Ukrop’s has issued a prospectus, opening itself up to potential buyers.
In a note released yesterday to employees, Bobby Ukrop wrote that, “There has been a lot of speculation in the last few days about the future of Ukrop’s. All of this is based on rumors, anonymous blog postings, and industry chatter. Anything I say at this point would just add fuel to the fire. For example, I could say that, yes, other companies are interested in buying Ukrop’s. But the truth is that there have always been companies interested in buying us, so there’s nothing new here.” You can read the full note
Over the past decade no area of the Mid-Atlantic region has changed more than the Richmond market. Not only has Kroger entered to become a formidable competitor, Wal-Mart’s 10 area units are all SuperCenters, Food Lion dots the landscape with 52 stores and newer entries such as Whole Foods, Trader Joe’s and The Fresh Market have all added to the overstoring of the Richmond VA area.
Now it appears that Richmond’s oldest and most distinguished retail organization, Ukrop’s Super Markets, may be looking to sell its 28 stores. Officially, the company hasn’t addressed these reports specifically, noting that it stores don’t comment on rumors, but multiple industry sources have confirmed that a prospectus has been issued detailing vital Ukrop’s store data and seeking interest in a potential sale. Those retailers who have reportedly responded to the prospectus include Supervalu (Ukrop’s principal supplier), Ahold and Harris Teeter . Several sources believed that Harris Teeter remains the frontrunner and that Supervalu (which currently has many issues on its plate) has dropped out the potential acquisition process.
Of course, there is no guarantee that any bidder would pay the premium price that acquiring Ukrop’s would likely demand. And even if that price were met, it wouldn’t be surprising to see the deal be pulled by the Ukrop family which has a deep emotional attachment to the community and to the company itself. But then again no one thought Anheuser Busch would sell out either.
While newer competition may have been able to match Ukrop’s beautiful stores and perishables-driven format, a key differential which has also adversely impacted the company is its policy of not opening on Sundays, now the busiest shopping day of the week. Ukrop’s also does not sell beer or wine at its stores. Additionally, two of Ukrop’s newer stores outside the core Richmond market – One in Roanoke and its second unit in Williamsburg – have struggled.
Ukrop’s now has only one store in greater Williamsburg, at Monticello Marketplace. A second store on Mooretown Road near Home Depot closed in January for lack of customers.
The company may determine that now is the optimal time cash in. New entrants to the Richmond and Williamsburg grocery scene, like Trader Joe’s, Whole Foods and Fresh Market are taking some of the high end shoppers. Meanwhile Kroger, Food Lion and Wal-Mart are siphoning off some of the low-end customers. Ukrop’s will soon have to battle Harris Teeter here in Williamsburg, where Harris Teeter will be opening a new store in November near Kingsmill . There is another Harris Teeter in Charlottesville and more in Northern Virginia. .
Filed under: Business News, Grocery Stores, Williamsburg general information, williamsburg va
The Fredericksburg store is also faltering. It has been crippled by competition.