It’s taken a while for Rick Cohen’s initial bet on the Deep South to pay off but it looks like it’s finally happening.
The chairman and chief executive officer of C&S Wholesale Grocers — once described by a colleague as someone who believes in “eating the elephant one bite at a time” — invested in the South nearly a decade ago when it took over distribution for Bi-Lo and Bruno’s stores. That relationship survived several subsequent bankruptcies, breakups and reunions, before C&S agreed earlier this year to take over distribution of Winn-Dixie stores, which in the meantime had been acquired by Bi-Lo’s parent.
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The ink was barely dry on that deal before Bi-Lo Holdings announced the pending acquisition of more than 150 stores from Delhaize, including the Sweetbay and Harveys chains. And that’s the kind of volume C&S and Cohen were seeking all along, observers say.
“The Winn-Dixie deal for C&S really solidifies them in the South and the whole Eastern Seaboard,” said Burt P. Flickinger III, managing director of Strategic Resource Group, New York. “If you go back a decade ago, Supervalu and Fleming really dominated this area, and C&S had formidable competitors like Merchants Distributors Inc. in the Southeast and Bozzuto’s and Wakefern in the Northeast. But for one voluntary to have so many contiguous markets really does a lot to solidify C&S and so it can start to achieve the same scale in the Southeast it has enjoyed in the Northeast.”
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Cohen, a grandson of C&S founder Israel Cohen, did not respond to a request for an interview.
Mark Heckman, a Sarasota, Fla.-based industry consultant, said he felt influence from C&S would only help spark additional consolidation from the growing Bi-Lo/Winn-Dixie group.
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“Winn-Dixie is a decent-sized retailer I have high regard for, and I do think there will probably be more expansion. I think [Bi-Lo Holdings chief executive] Randall Onstead will be aggressive in looking at opportunities to make acquisitions in contiguous markets. I think all of that could be good for C&S. If C&S gets ingrained in the DNA of Winn-Dixie then perhaps they will benefit from the expansion as well.”
Although C&S has a longstanding reputation for providing “no-frills” services to its wholesale customers, Heckman said the distributor may look to further leverage its growing buying power by participating in vendor programs where possible.
“They are expanding their range of services to become more of a comprehensive resource for retailers instead of just being a distribution resource,” he said. “They are starting to get fairly deeply into analytics and markets and some of the other things that other marketing services companies are trying to do for retailers. C&S has access to retailers’ supply line data and distribution data; they are wanting — and smartly so — to capitalize on that.”
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