Retailers

Save A Lot Completes Transition to Wholesale Model

Move an important step for the company's overall mission
Save A Lot
Photo courtesy of Save A Lot

Save A Lot, one of the largest discount grocery chains in the U.S., announced the December completion of its ongoing relicensing program and its transition to a pure play wholesale model.

This follows the sale of nearly 300 corporate-operated locations to retail partners, who will continue to operate the stores under the Save A Lot brand.

“Becoming a wholesaler was an important step in Save A Lot’s mission to lead as the brand of choice for value-oriented consumers, putting the company on an entirely new financial trajectory,” said Mark Hutchens, EVP and CFO. “Since its inception, Save A Lot has filled an important need as an affordable, high-quality hometown grocer in each community it serves. This relicensing program positions our company to better serve our retail partners as they support their customers and communities. We’ve entered 2022 with strong momentum and improved financials that will help fuel the growth of the business in the years ahead.”

The company said the completion of the transition corresponds with the recent appointment of its new CEO, Leon Bergmann, who will assume the role Feb. 21.

“Incoming CEO Leon Bergmann brings significant wholesale and grocery experience that is ideally suited to lead this model,” said Justin Shaw, chairman of the board, in a statement. “The board and management team are excited for this next chapter of growth for the Save A Lot business and to support the entrepreneurial ambitions of all our dedicated retail partners.”

The company said in total it has completed 34 transactions by selling corporate-operated locations outside of St. Louis, Mo., to local operating groups. Operators taking ownership of the stores include a number of existing Save A Lot retailers such as Fresh Encounter Inc., the Janes Group, Leevers Supermarkets Inc., and Save Philly Stores, who added 51, 18, 17 and 14 stores to their portfolios, respectively.

Additionally, Save A Lot said it welcomed 15 new ownership groups, including Yellow Banana LLC, a portfolio company of 127 Wall Holdings LLC, which purchased 38 stores across five states, and Ascend Grocery LLC, which purchased 33 locations in Florida. The company said it will retain 18 stores in its home market of St. Louis as a test market for new innovations and programs.

With approximately 900 stores in 32 states, Save A Lot said in a statement it “believes that operating a pure wholesale model will provide retail partners with the flexibility necessary to respond to the needs of the local communities they serve. Owners are able to customize their assortment to cater to the tastes and preferences of their individual customers.

Looking to modernize, the company said the relicensing effort builds on that by working with its independent license owners to remodel all stores by 2024.

The new store design, the company said reflects the contemporary evolution of the brand which it said features a lighter, brighter and easier-to-shop footprint that includes new decor and an enhanced shopping environment.

In 2021, retail partners completed remodels of 200 Save A Lot stores.

“Save A Lot’s momentum is built through our strong retail partner network, whose commitment to our brand and the consumers that we serve is unmatched in the industry,” Hutchens said. “We are proud to share our success with these dedicated owners who are incredibly passionate about providing the best Save A Lot experience to their neighborhood customers.”

The transition also incorporates a series of business and brand development efforts by the company, which it said includes the launch of Save A Lot’s campaign, “Like, A Lot A Lot.”

The campaign featured a one-of-a-kind music video that has received over 6 million views on YouTube and other social media platforms.

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