Pharmacy Shutdown Changes Outlook for Shoppers Food Sale

Pharmacy departments inside 30 Shoppers Food locations will be closed, indicating that ongoing efforts to sell the chain likely won’t result in their transfer to full-service supermarket operators—and could be a prelude to wider shutdown, sources say.

Distributor United Natural Foods Inc. (UNFI), which acquired Shoppers Food & Pharmacy as part of its takeover over then-owner Supervalu last year, has been marketing the chain for sale. In early March, UNFI CEO Steven Spinner said the company was “well down the path” of selling the chain and hoped to have a deal announced within months. But details beyond that have been tightly guarded.

Shoppers currently operates 46 stores in the greater Baltimore-Washington area.

UNFI said the pharmacy scripts and inventory at 24 stores have been purchased by CVS, and that Walgreens has purchased the scripts and inventory at the other six locations. It said it had “no immediate plans” to close stores. The 30 pharmacies to be sold represent all of Shoppers’ in-store drugstores.

The shutdown of pharmacies would indicate UNFI has widened its search for buyers beyond traditional food and drug retailers, such as local competitors Giant Food, Safeway and Harris Teeter, while dealing a blow to store traffic and sales volume. Giant has acquired several Shoppers locations over the last year piecemeal.

Related:Who Will Shop for Shoppers?

“Closing pharmacies will affect customer counts, because shoppers will no longer come to the store to drop off prescriptions and shop. That’s a big deal,” one industry source, who asked to be anonymous, told WGB. “But it does give the seller more flexibility. They could sell it now to a Kohl’s department store, or a Staples, or an Amazon fulfillment center. It could be anybody, or a combination of them.”

Union-represented pharmacy techs at affected stores will be informed before their pharmacy closes and will be placed on their respective store’s schedules in a clerk position with no effect to their rate of pay or status, according to a joint statement from United Food and Commercial Workers (UFCW) Locals 27 and 400.

The UFCW has been keeping a close eye on progress toward a sale, and over recent weeks has expressed frustration with what it called a lack of transparency from Shoppers’ owner. According to UFCW Local 400 President Mark Federici, Shoppers must have the agreement of any buyer of 10% or more of its stores to take its contract and the current employees as part of a sale.