CHICAGO -- IGA here said last week it is in favor of the megamergers taking place in the industry, despite the apparent contradiction in that attitude.
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In his remarks at a press conference here during last week's Food Marketing Institute convention, Haggai made reference to several mergers that have been completed or are still pending -- including Kroger Co., Cincinnati, with Fred Meyer Inc., Portland, Ore.; Albertson's, Boise, Idaho, with American Stores Co., Salt Lake City; Safeway, Pleasanton, Calif., with Carr Gottstein Foods, Anchorage, Alaska; and Ahold USA, Atlanta, with Pathmark Stores, Carteret, N.J.
"This merger fever can be a plus for independents," Haggai said. "With more than 3,600 stores in the IGA system, the IGA banner has positioned the independent supermarket retailer as a major player. In addition, with chain consolidation and competition from other classes of trade, "IGA has become the answer many independents are looking for," he declared.
"Not only have operational and promotional programs given IGA stores a competitive edge in the marketplace, but our strategic growth plans have also given independents the confidence and power to compete among the best in the world."
While some retailers feel threatened by chain consolidations, "IGA instead sees many opportunities that exist in consolidations because they can also work for the benefit of the independent. We have strategically positioned the IGA network to help independents join together while still maintaining their status as independent supermarketers.
"The chains are doing what they need to do to take on the mass merchandisers. What we can do is capitalize on the trends against large store size.
"As the chains get bigger, that improves the niche of IGA retailers as community markets," Haggai said. "In addition, the large chains have to divest stores that we need to buy, so we're bullish on mergers."
Haggai said he has discussed the megamergers with the Federal Trade Commission, "and even the FTC was surprised by our stance," he noted. "The FTC thought we'd want some help from the government preventing these mergers, but we believe the mergers are healthy. And we think we're growing more effective in this climate of consolidation.
"So we say bravo to the chains, because in the long run the consumer wins and therefore we all win."
In other matters:
Haggai said IGA expects to have a record year, with sales from domestic and overseas stores licensed by IGA totaling $18 billion. "While everyone else is looking ahead to the millennium, we're looking forward to a great 1999 -- we'll let 2000 happen when it happens," he said.
The upturn in IGA sales is due in part to initiatives from IGA's wholesale members, Haggai said, including the sale by Fleming Cos., Oklahoma City, of its Springfield, Missouri-based Consumers Markets chain to independents who will operate under the IGA banner.
