Dive Brief:
- Central Grocers plans to sell 22 Strack & Van Til stores and will close nine Ultra Foods locations, according to the Shelby Report and the Northwest Indiana Times.
- In response to the announcement, the International Brotherhood Union Local 703 filed a federal lawsuit seeking a restraining order to prevent the sale, according to an article in the Northwest Indiana Times. The union's attorney says a sale could violate the collective bargaining agreement with 300 warehouse workers.
- Last March, Strack & Van Til closed five stores. If it goes through, the sale would leave two remaining Ultra Foods stores: One in Kankakee, IL and one in Highland, IN.
Dive Insight:
Central Grocers' move comes at a time when smaller retail chains are struggling. Analysts say that unless a smaller grocer distinguishes itself, more could find themselves in trouble soon.
The popular regional grocery, known as Stracks to locals, has recently dealt with turbulence. Competition in its main territory near Chicago has intensified, with the area becoming saturated with stores. And Strack & Van Til CEO Jeff Strack, grandson of the store's founder, has only been on the job a year. He succeeded former CEO Ken Diehl, who left the grocer after less than two years.
Already, we’ve seen once-popular small stores closing, and Marsh Supermarkets may be headed for bankruptcy based on recent reports. With a rise of online grocery and the number of options to purchase groceries continues to rise, these smaller grocery stores face stiffer competition.
The key is to offer something unique in the crowded marketplace. Ahold Delhaize is betting on fresh affordability with Food Lion, while Southeast Grocers sees a robust private label lineup as key to helping its stores stand out. Others are catering to ethnic communities.
