Dive Brief:
- Save A Lot has sold 32 of its stores in the greater Cleveland, Chicago and Milwaukee areas to Yellow Banana, LLC, which is a part of the minority-owned holding company 127 Wall Holdings LLC, according to a press release on Tuesday. Yellow Banana will operate the locations it is acquiring under the Save A Lot name.
- Each of the stores is slated for a “significant” remodel next year to showcase Save A Lot’s branding and will see an expanded assortment of local and regional products, the press release said.
- The sale of the stores, which generate annual revenues of over $130 million, converts them to local ownership and furthers the discount grocer’s efforts to transition to a wholesale model.
Dive Insight:
Tuesday's sale announcement marks the latest batch of corporate-owned stores Save A Lot has sold to new owners who have agreed to continue using the grocer’s branding.
When Save A Lot announced in December the sale of 51 stores in Tampa, Florida, to Fresh Encounter, an Ohio-based grocery operator, the discount grocery chain said it planned to sell more than 300 stores to other retailers that will retain the name. The grocer is looking to retain its brand while also cutting its debt.
Yellow Banana plans to retain the more than 400 store associates and keep their current wages, health insurance and retirement benefits, the announcement said, noting the new owner intends to hire additional employees as well. The remodeling efforts for the stores will include new decor, upgraded flooring and lighting, and updated produce and meat cases.
In recent years, Save A Lot has grappled with industry competition and a large debt load. In July, then-CEO Kenneth McGrath said he was departing the grocer to return to Lidl. That same month, the grocer unveiled an advertising campaign with a music video and store jingle, following in the footsteps of other offbeat campaigns from retailers like Lidl and Aldi. The campaign served as a way to showcase Save A Lot’s store remodeling push, which has accelerated in recent months and now aims to touch all 1,000 Save A Lot stores by 2024.
