More than two years after unveiling plans to shift to a wholesale business strategy, discount grocer Save A Lot said the transition is done.
St. Louis-based Save A Lot said Thursday that it now operates under a “pure-play wholesale model.” As planned under the business transition, announced in late December 2020, the company has sold almost 300 of its corporate-run stores to independent grocery retailers, which through a relicensing program will operate the supermarkets under the Save A Lot banner.
Overall, Save A Lot said it made 34 transactions in selling corporate stores outside the St. Louis market to local retailers. Operators acquiring locations included some existing Save A Lot retailers, such as Fresh Encounter Inc. (51 stores), Janes Group (18 stores), Leevers Supermarkets Inc. (17 stores) and Save Philly Stores (14 stores). The transactions also included 15 new ownership groups, such as Yellow Banana LLC (38 stores in five states) and Ascend Grocery LLC (33 stores in Florida).
In its hometown of St. Louis, Save A Lot has retained 18 stores as a test market for new innovations and programs.
“Becoming a wholesaler was an important step in Save A Lot’s mission to lead as the brand of choice for value-oriented consumers, putting the company on an entirely new financial trajectory,” Mark Hutchens, executive vice president and chief financial officer at Save A Lot, said in a statement. “Since its inception, Save A Lot has filled an important need as an affordable, high-quality hometown grocer in each community it serves. This relicensing program positions our company to better serve our retail partners as they support their customers and communities. We’ve entered 2022 with strong momentum and improved financials that will help fuel the growth of the business in the years ahead.”
Last week, Save A Lot announced grocery wholesale veteran Leon Bergmann as its new CEO.
At the time the wholesale business transition was announced, Save A Lot operated 14 distribution centers and had a retail network of more than 1,000 stores in 33 states, with the vast majority of the locations licensed by over 200 independent grocers. The company now has 13 distribution centers and serves about 900 stores in 32 states. Last July, Save A Lot also said it plans to remodel a third of its store base in 2021 and upgrade the rest of the stores by 2024.
Save A Lot noted that the retailer-to-wholesaler migration dovetails with its announcement last week of new CEO Leon Bergmann, who is slated to join the company on Feb. 21. The addition of the longtime grocery wholesale executive came nearly four months after Save A Lot confirmed the appointment of Craig Herkert as interim chief executive upon the exit of CEO Kenneth McGrath.
“Incoming CEO Leon Bergmann brings significant wholesale and grocery experience that is ideally suited to lead this model,” Save A Lot Chairman Justin Shaw stated. “The board and management team are excited for this next chapter of growth for the Save A Lot business and to support the entrepreneurial ambitions of all our dedicated retail partners.”
Store remodels have included an enhanced shopping environment and selection, a new decor package and store layout, and conversion to Save A Lot’s latest branding. In late July, the company kicked off a brand refresh led by an updated logo and a marketing campaign highlighting the value that shoppers find in its grocery stores. The effort also included updated packaging for more than 55 private brands.
“Save A Lot’s momentum is built through our strong retail partner network, whose commitment to our brand and the consumers that we serve is unmatched in the industry,” Hutchens added. “We are proud to share our success with these dedicated owners who are incredibly passionate about providing the best Save A Lot experience to their neighborhood customers.”