Published on: July 15, 2009There are numerous published reports that Ukrop’s has circulated a prospectus and is in negotiations with potential buyers.
The family-owned company, which began selling groceries in the Central Virginia market in 1937, is not commenting on the reports. Among the companies mentioned as probable suitors for the 28-store company are Harris Teeter, Supervalu and Ahold USA.
Recent months have not been kind to Ukrop’s, which in the Richmond market slipped into second place with a 17.58 percent market share, with Food Lion emerging as the market leader with a more than 19 percent share. In addition, the company has been reported to be struggling in the Roanoke market, where it operates one store; after a strong opening there, sales dropped as customers utilized it for fresh and prepared foods but largely did the bulk of their main grocery shopping elsewhere. According to the company, it is currently not in a “sustainable position” in Roanoke.
In addition, Ukrop’s has been criticized in some quarters, even in the face of increased competition and sales decreases, for not adjusting its long time policies of staying closed on Sundays and not selling alcohol … traditions that no doubt would change under new ownership.
- KC's View:
- I’m hearing Harris Teeter is the most likely buyer. That may not play out, but that’s what I’m being told by some pretty good sources. (There also has been one report that Harris Teeter has applied for 28 new liquor licenses in Virginia, which could be a give away.)
Interestingly, when it was reported several years ago that Ukrop’s was for sale, both chairman James E. Ukrop and president/CEO Robert S. Ukrop went on record as denying the report.
“We can assure you that we have not spoken or talked to a single company, broker or banker about the possibility of selling our company. End of story," said Jim Ukrop.
“I echo what he told you,” added Bobby Ukrop.
This time, according to the Richmond Times-Dispatch, there has been no comment from Ukrop’s. The silence may be telling.
There will be plenty of opportunity to do a post mortem and assess blame if this sale goes through. But I’ll say this right now. A sale may be inevitable in this market, but the industry will be poorer if it does not have an independent-minded family like the Ukrop's as part of it.