WASHINGTON — The Federal Trade Commission on Friday confirmed that the transfer of a Newtown, Pa., Genuardi’s store from Giant-Carlisle to McCaffrey’s was the only condition of its approval of Giant’s acquisition of Safeway’s Genuardi’s stores.
According to the FTC's complaint, the Newton store acqusition would reduce the number of supermarket competitors there from three to two, with Giant and Acme being the only remaining retail grocery stores.
“The Newtown market is already highly concentrated, and would become significantly more so post-acquisition,” the FTC said.
McCaffery’s to Buy Genuardi’s Store Under FTC Review
The transaction also would increase the likelihood that Giant and Acme would be able to tacitly or expressly work together to raise prices or otherwise reduce competition in a way that would harm local consumers, the FTC alleged.
As previously reported in SN, Giant has agreed to sell the Newtown store to McCaffrey's, Langhorne, Pa. That deal must be completed no later than 10 days after Ahold finalizes its deal with Safeway, the FTC said. Giant is also prohibited from interfering with McCaffrey's hiring or employing anyone currently working at the Newtown Genuardi's, the FTC said.
The FTC said it would move to finalize the order following a 30-day public comment period ending July 16.
Giant announced an agreement earlier this year to purchase 16 Genuardi’s stores for $106 million from Safeway, which said it would exit the Philadelphia market and shut down the Genuardi’s banner. The McCaffery's/Newtown deal would leave Giant with 15 Genuardi's. Weis Markets, Sunbury, Pa., later said it would buy another three Genuardi’s stores from Safeway.
That deal closed last week, said Weis, which planned to reopen the locations under the Weis banner late last week.
Jim McCaffery, executive vice president of McCaffery’s, told SN that his company had an eye on Genuardi’s Newtown location prior to the Giant deal. He said McCaffery’s was contacted by Giant to work out a deal as a result of the FTC investigation.
Giant operates a store around two miles away in Langhorne and would acquire a second Langhorne store if the Genuardi’s deal went through.
The store would be the fourth location for McCaffery’s. McCaffery said his company intended to close the store for seven days to clean and restock it following the transfer, then undertake a remodeling tentatively scheduled to be complete before the holiday season. He said he envisioned recasting the store to focus on a fresh presentation and prepared foods like McCaffery’s other three units.
The three stores Weis Markets purchased, in Conshohocken, Doylestown and East Norriton, Pa., were expected to reopen late last week after a brief closure. To staff these stores, Weis Markets has hired 218 former Genuardi’s employees and has added 150 positions, which will allow each store to double the number of cashiers it employs and increase front-end service.
The stores Giant is purchasing are in the Pennsylvania towns of Chalfont, East Marlborough, Flourtown, Huntingdon Valley, Jamison, King of Prussia, Langhorne, Maple Glen, North Wales, Roslyn, Spring House, Springfield, St. David’s, West Chester and Wynnewood.
Five Genuardi’s stores were still unsold and operating as of late last week: Audubon, Pa.; Barnegat, N.J.; Egg Harbor, N.J.; Marlton, N.J. and Cherry Hill, N.J. An employee at the Cherry Hill store said that location was set for closure on Aug. 4.
