Mega-grocer Albertsons is in advanced talks to acquire New York-based supermarket chain Price Chopper for as much as $1 billion, according to a report from Reuters. Neither retailer has yet commented officially on the matter.
In a sector that has experienced significant consolidation in recent years, with major European supermarket conglomerates Ahold and Delhaize completing their merger in 2016 and Albertsons’ parent company Cerberus Capital Management acquiring Safeway for $9 billion to start 2015, regional brands such as Price Chopper are battling more competition from Walmart and discount chains such as Aldi (and likely future U.S. entrant Lidl).
Price Chopper has been in the process of rebranding its 135 stores to the name Market 32, but its corporate owners Golub Corp. have sought financial partners to support the plan’s capital requirements. In December 2014, former Price Chopper CEO Jerry Golub revealed it would cost approximately $300 million over a five-year stretch to transform half of its stores, so the added backing from Albertsons could help finance the rebranding while enabling the retailer to focus on other budget priorities.
Although the Golub family has owned Price Chopper since Lewis Golub started the company as a wholesale grocery warehouse in 1922, the arduous transformation effort has pressured the owners into considering a possible sale, according to Supermarket News. In what may be taken as a sign of the supermarket chain’s future, Scott Grimmett took over from Jerry Golub as CEO of Golub Corp. in January 2016, making him the first non-family member to hold that position.
The move would further establish the Albertsons brand, which already operates 2,200 U.S. stores under more than 20 banners, as a power in the Northeast. The Price Chopper acquisition would fill a gap between its Pennsylvania-based Acme and Massachusetts-based Shaw’s brands.