April 2011 – Supermarket News

Newspaper / Magazine:Supermarket News
Article Title:Lowe's Market Acquires Super S
Date:April 11, 2011
Author:Elliot Zwiebach
Link:http://supermarketnews.com/retail-amp-financial/lowes-market-acquires-super-s

SupermarketNews_logoLittlefield, Texas — Lowe’s Market here has increased its store count by more than a third with the purchase of San Antonio-based Super S Foods.

The 53-store acquisition, which closed late last month, gives Lowe’s 143 units generating annual volume of approximately $950 million, combining an estimated $700 million from Lowe’s with an estimated $250 million from Super S, industry sources told SN.

Lowe’s is supplied by Affiliated Foods, Amarillo, while Super S is supplied by Grocers Supply Co., Houston. According to Roger Lowe Jr., chief executive officer of Lowe’s, the transition of the acquired stores to Affiliated is scheduled to begin this week and should be completed by mid-May.

“After the wholesaler transition, we will operate them for a while, and over time we will reinvest in those markets,” he added.

The Lowe’s chain operates primarily in northwest Texas — in the Texas Panhandle area — with additional stores in New Mexico and a single unit in Arizona; Super S operates in central and south Texas, with no overlap between each other’s stores, local sources pointed out.

Asked how the deal came about, Lowe told SN, “We simply reached out to them.”

Lowe’s has agreed to retain all Super S store personnel, including store managers, plus all operating supervisors and some members of Super S management, Lowe said.

The new owners will also retain the Super S name on the stores for several months, “though we may change that somewhere down the line,” Lowe said.

While some local sources said Lowe’s might simply add its name to the Super S banner, Lowe told SN, “None of those decisions has been made yet.”

Lowe’s stores are generally larger than those of Super S, ranging from 9,000 to 65,000 square feet, with an average of 35,000 square feet; whereas Super S, which grew through acquisitions, has stores that run from 15,000 square feet to 32,000 square feet, with most in the 18,000- to 20,000-square-foot range.

Both companies operate with a high-low pricing format and both are family-owned — Lowe’s, which originated in 1964, by the second and third generations of the Lowe family; Super S, which began in 1973, by the second generation of the McBurnett family.

Other than a change in private-label names, the changes at the stores are likely to be minimal, sources noted.

Super S features the Parade and Better Valu private labels. Affiliated, a member-owned cooperative serving some 700 stores in several states, is a member of the Western Family Foods private-label cooperative, whose brands include Western Family, Shurfine, Better Buy, Market Choice, and Shur Saving.