Save A Lot said Dec. 28 it has agreed to sell 51 company-operated stores in the Tampa, Fla., market to Fresh Encounter, which will operate the stores under their current banner.
The move represents a significant step in the St. Louis discounter’s transition to a wholesaler while nearly doubling the number of stores operated by Fresh Encounter, the Findlay, Ohio-based retailer owned by the Needler family. Fresh Encounter operates 61 stores in Ohio, Kentucky and Indiana under the Save A Lot, Great Scot, Community Markets, Germantown Fresh Market, Needler’s Fresh Market, Remke Markets, Sack n’ Save, King Saver and Chief Supermarkets banners.
Financial terms were not disclosed.
Save A Lot said the transaction builds on the completion of its recapitalization earlier this year and supports a strategic plan to shed more than 300 company-owned stores to independent licensees. When the recapitalization was announced in January 2020, Save A Lot owned and operated 417 stores, with another 698 operated by independent licensees. Departures and closures since then place Save A Lot at about 1,000 stores.
The company said it intends to continue to operate its 21 stores in the St. Louis market, where they will serve as a “testing ground.”
“We are excited to expand our partnership with Michael Needler and the Fresh Encounter team, who have been fantastic partners, strong operators and excellent ambassadors of the Save A Lot brand,” said Kenneth McGrath, CEO of Save A Lot. “Through the relicensing transactions we are executing across our footprint, we believe that we will be even better positioned to continue to serve the communities in which we operate. We currently have a dedicated group of retail partners that we support, and we look forward to helping other entrepreneurs own, operate and succeed in their own business.”
To date, Save A Lot has executed seven sale transactions, comprising 82 stores, including those being sold to Fresh Encounter. The company expects to complete its relicensing program in 2021. A significant portion of Save A Lot corporate stores are in Florida and served from a Plant City distribution center there.
Save A Lot stores operate in 33 states and are served from 14 wholesale distribution centers. The company serves as a licensor and wholesale partner to more than 200 independent owners and operators. Save A Lot is a hard-discount model with limited SKUs and a stable of private brand offerings that primarily targets lower-income shoppers. Through an emphasis on serving and supporting its retail partners, Save A Lot said it has built a “sustainable, high-growth and community-focused business,” with a mission of adding unmatched value to local communities. Owners are able to customize store assortments to cater to the tastes and preferences of their local customers.
“The Fresh Encounter family of companies has a culture that prioritizes being positive, appreciative and resilient, and we are eager to onboard the new Florida associates. Over the past several months I have toured stores in the greater Tampa market and I’m impressed with the Save A Lot team,” said Michael Needler Jr., president and CEO of Fresh Encounter. “I am truly humbled to be joining them in delighting our customers, nourishing the communities and inspiring pride in the team. Kenneth and Kevin Proctor and the rest of the Save A Lot corporate team are transformative, and we are equally eager to join their efforts in reestablishing the Save A Lot brand for tomorrow’s competitive environment.”
PJ Solomon served as financial adviser and Troutman Pepper served as legal counsel to Save A Lot in connection with the transaction.