Stop & Shop Acquiring King Kullen as Long Island Battle Intensifies

In a deal that could defend turf and grow its presence on wealthy Long Island, Ahold Delhaize’s Stop & Shop division said it would acquire rival King Kullen Grocery Co. 

The deal includes King Kullen’s 32 supermarkets, five Wild By Nature natural foods stores and use of its corporate offices in Bethpage, N.Y. 

The acquisition is expected to close during the first quarter of 2019, subject to customary closing conditions. Financial terms were not disclosed.

Although plans for the acquired units were not immediately made clear, the deal signals an aggressive move to strengthen Stop & Shop’s leading market share on Long Island, where hard discounter Lidl is preparing to take over two dozen former Best Market stores. Aldi and ShopRite have also established a stronger presence in the market in recent years as the 2005 A&P bankruptcy crumbled one-time Long Island stalwarts Pathmark and Waldbaums.

King Kullen has likewise experienced declining market share. It calls itself “America’s first supermarket,” having pioneered the self-service store concept. The company was founded in Queens, N.Y., in 1930 by Michael Cullen, a veteran of A&P and Kroger. His descendants still run the company, with Brian Cullen and J. Donald Kennedy serving as co-presidents.

Related:A New Signal for Stop & Shop

Photograph courtesy of King Kullen Grocery Co.

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

Stop & Shop is expected to shortly begin renovation projects at all of its existing Long Island stores as part of a comprehensive rebranding. It was not immediately made clear whether Stop & Shop would preserve King Kullen’s banner and branding, or even all of its stores. “We will evaluate the stores and make these decisions in the near future,” spokeswoman Jennifer Brogan said in an email to WGB.

“In 1930, Michael J. Cullen opened the first King Kullen and ushered in the era of the great American supermarket,” said Brian Cullen. “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.”

Ahold Delhaize CEO Frans Muller said the acquisition of King Kullen “underscores our commitment to further strengthen the positions of our great local brands in the U.S., both through organic growth and fill-in acquisitions.”

Related:Inside the 'Reimagined' Stop & Shop

The Food Partners LLC served as the financial and strategic adviser to Stop & Shop, while JP Morgan served as the financial and strategic adviser to King Kullen.