Changes are unlikely for Salisbury Giant store

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Despite local concern that Giant will close, causing loss of jobs and eliminating a popular supermarket, it isn’t likely.

“We do not anticipate any store closures as part of the FTC review process,” Chris Brand, external communications and public affairs lead for Ahold USA, told the Salisbury Independent this week.

Based in Carlisle, Pa., Ahold is the parent company of Giant of Maryland.

The issue centers on a complicated network of FTC regulations, anti-trust laws and the merger of Royal Ahold, in the Netherlands, and the Belgian-based Delhaize Group.

Ahold owns supermarket chains including Giant, and Delhaize owns stores including Food Lion.  The merger, expected to be complete at mid-year, would result in Ahold-Delhaize, a huge supermarket chain with thousands of stores.

Among reported reasons for the merger is that traditional supermarket customers are being lured away by discount establishments or department stores that have started carrying groceries, such as Target. By merging, the two companies could save money and overhead expenses.

According to regulatory laws, the company cannot have a grocery dominance in the market, which it would through the Food Lions and Giant.

That doesn’t mean the local Giant would close. The www.supermarketnews.com website this week published a list of 83 stores Ahold and Delhaize want to sell as part of a merger, but the Salisbury location wasn’t included.

Brand said the company “continues to work toward the successful completion of the proposed merger between Ahold and the Delhaize Group.”

“The merger is currently under review by the Federal Trade Commission and remains on track for completion in mid-2016.As part of any merger approval process where there may be store divestitures, store visits may be conducted by potential buyers but it’s too early to speculate on the outcome of the FTC review process,” Brand said.

Earlier, Mayor Jake Day said there was “probably nothing to worry about.”

“Maybe there is a time to worry, but not is not the time. The rumor is that the Federal Trade Commission won’t allow them to retain one of their stores in this market and they would get out of this particular store.

“That would have to be part of some broad U.S. marketing strategy of theirs. One thing we learned is, Giant is the highest grossing supermarket on the Peninsula. When you’ve got a store that is a cash cow, that is the biggest cash cow on Delmarva, does it make sense that it would close? The FTC probably wouldn’t force it to close,” the mayor said.

Giant grosses an estimated $1 million weekly at the Salisbury location.

“If we make all those assumptions that we say we believe — even though nobody will say it for sure, even though it’s based on rumors of random people on Facebook – if that’s going to be the basis for our entire worrying conversation, then I would say there’s nothing to worry about. Keep in mind we’re talking about the highest grossing store being for sale. Not closing, mind you,” Day said.

“If we can make all these assumptions, let’s talk about who would buy it. It makes sense somebody would look for a supermarket that does that well,” Day said.

Harris Teeter is a possibility. It’s less likely Salisbury will get a Whole Foods and the footprint of Giant probably isn’t large enough for Wegmans, he said. Many Wegmans stores are 150,000 square feet. The average size of a Giant is 45,000 square feet, although some are much larger.

Harris Teeter officials have reportedly said Salisbury’s income and education demographics don’t fit the Harris Teeter business growth models. There is a Harris Teeter just west of Fenwick Island.

Waverly Plaza associates, who own the plaza where Giant is located, have no interest in selling the total property and little interest in redeveloping, Day said.

City leaders, he said, “Are working on it. It’s really a private sale due to an FCC ruling. There’s not a ton local government can do but I’m exploring everything we can,” the mayor wrote.

Giant controls the Salisbury store through 2035, but can sell those rights to another chain, such as Kroger or Harris Teeter.  If the government’s regulatory laws force Giant has to leave, it could sublet.

Real estate speculators have suggested Ahold could board up the store, but the government would likely not be satisfied with that, because it would further limit competition. Ahold would have to take steps to broaden competition.

 

Reach Susan Canfora at scanfora@newszap.com.

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