Under the Radar

ELLIOT ZWIEBACH

SN has, for the first time, compiled a list of the top 50 independent and small-chain supermarket operators whose volumes fall below $1 billion.

These are often local, community-based businesses that are employee- or family-owned, though in some cases they may operate on a regional basis or be owned by an investment group.

Most of these companies have virtually all their money tied up in a single business — supermarkets — and they range in size from single-store operators to chains with more than 100 locations.

A few of the companies at the top of this list also appear at the bottom of SN's annual Top 75 rankings, which were published last month.

To compile the 50 Independents list, SN consulted wholesalers and other sources, and contacted each company on the list in an effort to verify information. The volumes represent estimated totals for the fiscal year that most closely approximates calendar 2009. Chains that are owned by companies whose primary business is wholesaling are not included on this list.

The largest operator in terms of volume with sales below $1 billion in the U.S. is Fareway Stores, Boone, Iowa, which operates 96 units — most of which are in Iowa — with sales estimated at $950 million. Fareway is self-distributing.

Following Fareway on the list is King Kullen Grocery Co., Bethpage, N.Y., whose 52 stores in the New York metropolitan area account for estimated sales of $940 million. King Kullen is supplied by Bozzuto's, Cheshire, Conn.

While Fareway and King Kullen are family-owned, the No. 3 independent is Grocery Outlet, a Berkeley, Calif.-based group of 136 bargain-warehouse stores with a volume estimated at $875 million. Grocery Outlet, which is self-distributing, was owned solely by the Read family until late last year, when it sold part of its equity to Berkshire Partners, Boston.

Only one company on the list is publicly owned: the 18-store Gelson's Markets (No. 31) in Los Angeles, which is operated by Arden Group.

Following on the list are family-owned Woodman's Markets, Janseville, Wis., whose 12 self-distributing stores do about $860 million a year; and Redner's Markets, with 41 stores supplied by Minneapolis-based Supervalu and an estimated annual volume of $800 million.

Among the 50 companies, seven operators are self-distributing.

Of the other 43, Supervalu supplies 11; Associated Wholesale Grocers, Kansas City, Kansas, supplies seven; and Unified Grocers, Los Angeles, also supplies seven.

Five of the companies are ShopRite members supplied by Wakefern, Keasbey, N.J.; while three others are supplied by C&S Wholesale Grocers, Keene, N.H.; and two each by Bozzuto's and Grocers Supply Co., Houston.

Wholesalers supplying single companies on the list are Associated Food Stores, Salt Lake City; Associated Grocers of Florida, Miami; White Rose, a division of Associated Wholesalers Inc., Robesonia, Pa.; H.T. Hackney Co., Knoxville, Tenn.; Spartan Stores, Grand Rapids, Mich.; and URM Stores, Spokane, Wash.

TOP 50 SMALL CHAINS AND INDEPENDENTS

N/A = Not Available; AWG = Associated Wholesale Grocers: C&S = C&S Wholesale Grocers; AFS = Associated Food Stores