Price Chopper, Tops mega merger: Here are the changes we can expect to see and not see
Updated 8:18 AM; Today 8:00 AM
Syracuse, N.Y. -- The merger of Price Chopper/Market 32 and Tops Markets grocery store chains will create a “powerhouse” company with nearly 300 supermarkets, according to an industry consultant.
In terms of sales, the two will be second only to Wegmans in Upstate New York after the merger, said Burt P. Flickinger III, managing director of Strategic Resource Group, a consumer industry consulting firm.
“Strategically, it takes Price Chopper and Tops, neither of which were in the top five in supermarket chains in the Middle Atlantic and New England states, and the combination of the two creates a multi-regional powerhouse from Boston to Buffalo and Plattsburgh down to Pennsylvania, and the U.S.-Canadian border literally down to Baltimore-Washington,” he said.
Schenectady-based Price Chopper/Market 32 and Williamsville-based Tops Markets announced Monday they have entered into a definitive merger agreement. The transaction, which is subject to approval by the Federal Trade Commission, is expected to close in a few months.
Though the two companies are describing the alliance as a merger, Flickinger said it should really be viewed as the financially stronger Price Chopper taking over Tops. The move comes two years after Tops emerged from Chapter 11 bankruptcy with $445 million less in debt and 10 fewer stores.
What will the stores be named?
The Price Chopper and Tops names will remain on the stores, according to Price Chopper/Market 32 President and CEO Scott Grimmett, who will be CEO of the supermarkets’ new parent company.
“Our plan is to retain both names on the stores that they currently have today and continue like that,” he said in an interview with Syracuse.com | The Post-Standard. “We’re going to operate as two separate organizations, sharing where we can and where we find value. But it’s very important that we serve those customers that have grown to love us and shop us. Each company has its own uniqueness and its own customer base, and we need to make sure that’s never interrupted.”
Flickinger said it makes sense that the new company will keep the Tops brand.
“The Tops name is really important to keep because Tops for 50 years had the best real estate and locations off the major highways, expressways, interstates and key intersections,” he said. “And Tops has a very loyal customer base.”
Will stores be closed?
Don’t expect to see any Price Chopper or Tops stores closing, company officials said. Tops Chairman and CEO Frank Curci said the companies plan to keep all their 293 stores open.
“We believe our two organizations are almost perfectly contiguous,” he said. “We have a lot of great advisers here and we really believe that we’ll be able to accomplish all of the things that we’ve set out to accomplish and we’ll continue to serve the communities that we serve today.”
Price Chopper/Market 32 operates 130 Price Chopper and Market 32 stores and one Market Bistro, while Tops operates 162 stores.
What impact will the merger have on prices?
The merger’s biggest benefit for the two chains will be the greater scale and buying power it gives them.
“We’re iconic supermarket chains here in Upstate New York, but we’re relatively medium sized,” Curci said. “To have a scale that’s big enough to compete with the Wegmans, Walmarts and Aldis of the world, we think puts us in another league.”
“It gives us a bigger seat at the table,” added Grimmett.
To shoppers, that greater buying power the two chains will have with suppliers should mean lower prices, especially at Tops, which has had a reputation for having relatively high prices, according to Flickinger.
“The combined procurement power will allow Tops to be very competitive on everyday shelf prices, where Tops has been uncompetitive for the last 12 to 15 years,” he said.
Will brands sold change much?
Flickinger believes Tops will follow Price Chopper’s policy of carrying lots of locally produced products.
“Price Chopper is the best of the best in terms of supporting local farmers, growers, ranchers, food and beverage manufacturers, and supporting local brands,” he said. “By bringing back the brands, it’s going to create a real requiem for Tops.”
Will workers lose jobs?
Mergers often mean job cuts, but Grimmett and Curci said that won’t be the case with the alliance between Price Chopper and Tops.
“We both have growing businesses,” Curci said. “And getting enough good people is always a challenge, so we don’t really see any reductions at all. We have stores that need to be taken care of.”
Flickinger thinks the merger will spark an increase in jobs at Tops stores, which, because of the financial problems the chain has faced in recent years, are not as well staffed as Price Chopper stores. (Tops, with 162 stores, employs 14,000 people. With 131 stores, 31 fewer than Tops, Price Chopper employs 18,000 workers.)
“Instead of cutting store labor the way Tops does, Price Chopper invests in store staffing and invests in worker hours to profitably drive sales and service scores, so that’s going to be a big plus,” he said.
Will Tops stores remain unionized?
The United Food and Commercial Workers International Union represents 10,000 Tops employees. Price Chopper and Market 32 stores have no unions. The chains’ merger will create a “double-breasted” company -- half union and half non-union, Flickinger said.
That’s not unheard of in the grocery industry, and there is no reason Tops stores could not continue to operate as union shops while Price Chopper stores continue to operate without a union, he said.
Frank DeRiso, president of UFCW Local One, said in a statement Monday that the union’s collective bargaining agreements with Tops “are in full effect and have years left before they expire.”
“We will use every legal measure to make sure our members are treated fairly, and we look forward to working with the new management, as we always have, to ensure our members have stable employment,” he said.
Rick Moriarty covers business news and consumer issues. Got a tip, comment or story idea? Contact him anytime: Email | Twitter | Facebook | 315-470-3148
www.syracuse.com/business/2021/02/price-chopper-tops-mega-merger-here-are-the-changes-we-can-expect-to-see-and-not-see.htmlWell everything we need to know. Shop well and stay safe. Masks up and distance yourselves.
