The Dutch company Royal Ahold NV which is the parent company of Stop & Shop, recently announced a merger agreement with the Belgian based Delhaize Group which is the Parent Company of Hannaford. There are currently just under 400 Stop & Shops with over 180 Hannaford supermarkets. The merger, which is subject to government approval, is expected to be completed in 2016.
How will this merger the impact the Bedford Stop and Shop in the Great Road Shopping Center? In cases where both companies each have stores very close to each other, they frequently will divest some of these location in order to help ensure Federal Trade Commission approval of the merger. This was the case about 20 years ago in Bedford. When Stop & Shop bought Purity Supreme, they closed the Bedford Purity Supreme (now a Whole Foods) which was less than one mile down the road from the Bedford Stop & Shop. The nearest Hannaford stores to Bedford are in Waltham and Lowell so this should not be an issue for the Bedford store.
What could be more interesting is if the new company will keep both the Hannafords and Stop and Shop brands. Unlike other industry mergers where the brands are quickly combined for additional cost savings, supermarkets have tended to keep the individual brand names. For example when Shaw's bought Star Market in 1999 they kept both brands. While the conventional wisdom still supports keeping both names, this may make less sense nowadays. Ten years ago consumer did almost all their grocery shopping at one store while now a good portion split their shopping between multiple supermarkets. The net result is more emphasis on price and service than long term brand loyalty.
The Bedford Stop & Shop is facing a lot more competition with the recent opening of the Wegman's in Burlington as well as smaller stores that sell some groceries such as Ocean State Job Mart which is expected to open just a few door down at the old Staples location. In addition, Walmart now has over 650 Walmart Neighborhood Markets. These stores are much smaller than the typical Walmart (around 40,000 square feet) and primarily focus on groceries. While there are not yet any Walmart Neighborhood Markets in Massachusetts, I would expect to see some soon as Walmart is forecast to open around 200 additional Walmart Neighborhood Markets before the end of 2016.
What do you think? Would you like the Bedford Stop and Shop to keep it's name or would you have it rebrand at Hannaford?