SCHENECTADY, N.Y. -- Price Chopper Supermarkets here last week entered into a definitive agreement to purchase the 12-store Big D chain from Wonder Market Cos., Worcester, Mass.
The move would expand Price Chopper's presence in Massachusetts and add an estimated $160 million to its $1.5 billion sales base. It also would signal Wonder Market's exit from the grocery business after 72 years in the region.
Executives from both companies declined to discuss the financial terms of the agreement. The deal is expected to close by Nov. 1.
Price Chopper, a 79-store chain owned by Golub Corp. here, has six stores in Berkshire County in western Massachusetts. The acquisition extends the company's reach into the Greater Worcester market in the central part of the state. Through the deal, Price
Chopper will pick up Big D stores in Auburn, Framingham, Hudson, Marlboro, Milford, Shrewsbury, Spencer, Webster, West Boylston and Worcester.
"When we looked at the Worcester market, we knew that Big D was a desirable acquisition opportunity for Price Chopper," said Lewis Golub, chairman and chief executive officer of Price Chopper, in a statement. "They have a long history of success in the marketplace and have the No. 1 market share."
"This is a highly competitive market, and there's not a lot of room to build new stores," Neil Golub, president and chief operating officer, told SN. "This acquisition allows us to achieve critical mass in the region very quickly."
The transaction will strengthen Price Chopper's position in a region where it will vie for market share with several larger competitors, including Stop & Shop Supermarkets, Quincy, Mass.; Shaw's Supermarkets, East Bridgewater, Mass.; DeMoulas SuperMarkets, Tewksbury, Mass.; Purity Supreme, North Billerica, Mass., which Stop & Shop agreed to acquire earlier this year; Star Market Co., Cambridge, Mass.; Big Y Foods, Springfield, Mass., and A&P's New England division, also based in Springfield.
Wonder Market officials confirmed the deal but declined to answer specific questions. In a statement, however, Emily G. Holdstein, senior vice president, said Price Chopper "plan[s] to invest heavily in the Big D stores with remodels and expansions of virtually all of the stores planned over the next few years. Price Chopper is a people-oriented company and complements the Big D operation well."
Neil Golub told SN the Big D stores -- which average 20,000 to 40,000 square feet -- will all be converted to Price Chopper superstores within six months to a year after the deal closes. Some will be remodeled, while others will be replaced, although he said it was too early to pinpoint specific plans for each unit. Price Chopper intends to make a number of improvements in the Big D units, including bringing in new technologies and marketing concepts, expanding product lines, and adding or beefing up fresh and other departments as needed, he added.
"These are nice, clean stores with good variety, good people, good locations and a reputation of great community support," Neil Golub said. "We see a lot of opportunities here." Price Chopper plans to retain Big D's 1,300 store employees, although the offer has not been extended to Big D's staff of 50 at the Worcester headquarters. However, Price Chopper is interviewing some of those employees for positions within the company, he said. The chain has named Paul Johnson, executive vice president of operations at Big D, as Price Chopper's zone director for the region, he added.
The sale will mark the end of an era for a well-respected regional chain founded by Nathan Gould, who opened the first Wonder Market store in Clinton, Mass., in 1923.
According to Neil Golub, Wonder Market was looking to sell Big D because Calvin C. Gould -- the company's president and CEO and Nathan Gould's son -- wanted to retire and the Gould family, which owned the chain, did not want to continue in the grocery business. The family will now focus on its real estate holdings, including shopping centers, which are controlled by Wonder Properties Trust here.
Other observers said Wonder Market has suffered from shrinking sales and financial problems in recent years and had been looking to sell the Big D stores as far back as 1989. Under the Gould family ownership, the Big D stores were supplied by C&S Wholesale Grocers, Brattleboro, Vt. They will now be serviced by Price Chopper, which is self-supplied.
Kimberly Keyes, a spokeswoman for C&S, said Wonder Market had been a customer for 40 years, "but we've known for some time that they've been looking for a partner and we wish them all the best."