Following up on the news this week that C&S Wholesale Grocers has made a $1.77 billion bid to acquire SpartanNash, a deal that, if approved by regulators, would bring together the third and sixth ranked supermarket grocery wholesalers in the country …
I commented:
I’ve been doing this a long time, and when I started out there were three major wholesalers – Fleming, Supervalu and Scrivner – that don’t even exist as entities anymore. C&S and SpartanNash will legitimately argue that a heightened competitive environment makes this deal not only smart, but necessary, lest they go the way of their fallen brethren.
That said, even a reshuffled wholesale deck is in a game that in some ways is rigged against independents – behemoths such as Walmart, Costco and Amazon are incredibly powerful players with enormous resources. So the game is hardly over.
MNB reader Art Ruder passed along the pages below, which list the 53 largest retailers and wholesalers.
In 1987. Take a look – talk about a reshuffled deck.
KC’s View:
Those lists took me back. I started writing about the food industry back in 1984, and back in those days, the year-to-year lists didn’t change very much.
But now? It is extraordinary how many names on those lists don’t exist anymore, or have been subsumed by other, larger companies. (There are several names on those lists that actually still are in business for reasons that, to be honest, mystify me, because they are and always have been relentlessly mediocre. At best.)
One other thing that should be pointed out about the C&S-SpartanNash deal:
Though C&S and SpartanNash are sizeable wholesalers, with tens of billions in sales to retail customers, they are dwarfed by the behemoth retailers that dominate the business. Walmart has annual sales of about $650 billion, with 60 percent of it in grocery. Amazon, Costco, Aldi and Lidl each has annual grocery sales well in excess of $100 billion.
So if the government is going to evaluate this deal along economic lines, it would seem to be a no brainer. In fact, the only question that probably is worth asking is why every other wholesaler isn’t looking to merge, just to achieve necessary economies of scale?
Of course, there are questions about competition within the wholesale sector that are worth posing. But I cannot imagine that the answers will sink this proposed deal.
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