Stop & Shop to acquire King Kullen

Ahold Delhaize USA’s Stop & Shop plans to buy Long Island, N.Y., supermarket chain King Kullen Grocery Co. Inc.

Financial terms of the transaction weren’t disclosed. Stop & Shop said Friday that the deal includes 32 King Kullen stores, five Wild by Nature natural/organic supermarkets and the King Kullen corporate office in Bethpage, N.Y.

“King Kullen is a well-respected grocery chain in the Long Island market that has an 88-year tradition of excellent customer service,” Stop & Shop President Mark McGowan said in a statement. “We look forward to bringing our quality, selection and value to more communities in Nassau and Suffolk counties.”

Quincy, Mass.-based Stop & Shop said it expects to close the deal during the first quarter of 2019, pending customary closing conditions.

King Kullen is recognized by the Smithsonian Institution as the America’s first “supermarket.” Along with traditional grocery, King Kullen stores feature a large catering and prepared foods department, fresh-baked breads and sweets, healthy and organic product areas, pharmacies and online shopping. The company launched the Wild by Nature natural food store banner in 1995. However, the company has seen its store count dwindle over the years amid rising competition from larger supermarket chains, big-box discounters and, more recently, online grocery services.

Related:King Kullen boosts online grocery functionality

Currently, Stop & Shop has 51 locations on Long Island. Spokeswoman Jennifer Brogan said the retailer at this time has made no plans in terms of King Kullen banner conversions or store closings. “We will evaluate the stores and make these decisions in the near future,” she stated, adding that Stop & Shop also “is committed to retaining as many associates as possible.”

"In 1930, Michael J. Cullen opened the first King Kullen and ushered in the era of the great American supermarket,” stated Brian Cullen, co-president of King Kullen. “As a family-owned and -operated business, we are very proud of our heritage and extremely grateful to all of our associates and customers for their support over the years. We are confident the Stop & Shop brand will carry on our legacy of service in the region."

Stop & Shop’s planned purchase of King Kullen marks the second acquisition of a Long Island supermarket chain in the past six weeks. In mid-November, German deep discount grocer Lidl announced a deal to buy Bethpage-based Best Market, which has 24 of its 27 metropolitan New York stores on Long Island.

Frans Muller, president and CEO of Zaandam, Netherlands-based Ahold Delhaize, said in a recent interview that the company’s scale and large U.S. footprint give it an advantage in the fragmented retail grocery market on the East Coast. He acknowledged that the company also wouldn’t rule out the possibility of fill-in acquisitions in the U.S.

“There will be more consolidation in the industry for smaller and midsize companies, and it gives us a nice opportunity to gain share, deepen our footprints and make our brands along the East Coast even bigger,” he said.

Stop & Shop is Ahold Delhaize USA’s largest grocery chain. Over the next five years, plans call for Stop & Shop to roll out a new look and shopping experience at its 412 stores in Massachusetts, Connecticut, Rhode Island, New York and New Jersey. The brand refresh got under way in October at 21 stores in the Hartford, Conn., area. The pilot includes a modernized store format and a new logo that reflect a more customer-centric strategy based on convenience, particularly a wider array of fresh, fast, healthy and local food options and meal solutions.

Chainwide, 60 to 80 stores are due to be upgraded annually under the multiyear program, with capital outlays expected to total $1.6 billion to $2 billion. Stop & Shop stores on Long Island are next in line for upgrades, starting in the spring of 2019.