In a significant shake-up for the grocery industry, Stop & Shop has announced it will be closing 32 stores nationwide, including seven in the New York City area, as inflation-weary shoppers turn to more affordable options. The decision comes as the chain, owned by Dutch conglomerate Ahold Delhaize, grapples with financial challenges and shifting consumer preferences.
The Massachusetts-based company will shutter four locations on Long Island—in Greenvale, Hempstead, East Meadow, and Coram—as well as one store in Brooklyn and locations in Westchester and Rockland counties by November 2nd. The closures represent 8% of the chain’s total stores and will also impact shoppers in New Jersey, Massachusetts, Connecticut, and Rhode Island.
This move follows a May announcement where Stop & Shop indicated it would close “underperforming” stores, with industry experts predicting up to 50 closures. The final tally of 32 closures underscores the significant adjustments the company is making in response to the challenging economic climate.
Stop & Shop, which has been a household name for decades, has struggled to compete with more budget-friendly grocery chains. Burt Flickinger of Strategic Resource Group notes that shoppers pay between 12% to 14% more at Stop & Shop, a premium many are no longer willing to pay, especially after the economic strain of the pandemic and ongoing inflation.
“The value proposition and pricing at Stop & Shop are simply not strong enough,” acknowledged JJ Fleeman, CEO of Stop & Shop USA. The company’s statement on Friday emphasized its commitment to “delivering lower everyday prices and strong promotions,” but it appears these efforts have not been enough to retain cost-conscious customers.
The closures will affect approximately 3,800 union workers represented by the United Food and Commercial Workers (UFCW). John T. Niccollai, president of UFCW Local 464A, which represents 12 of the stores closing in New York and New Jersey, assured that displaced workers would be offered positions at nearby locations, thanks to the high turnover rates within the company. Stop & Shop has stated it does not plan to lay off any workers as part of this restructuring.
This development is part of a broader trend where many traditional grocery stores are facing mounting pressure from discount retailers like Walmart, Aldi, and Lidl, which have successfully captured the market by offering lower prices. Additionally, the rise of online grocery shopping has intensified competition, forcing many brick-and-mortar stores to reevaluate their strategies.
The closures will undoubtedly impact local communities, particularly those who have relied on Stop & Shop for their grocery needs. However, the company’s attempt to streamline operations and focus on competitive pricing may be necessary for its long-term survival in a fiercely competitive market.
As the grocery landscape continues to evolve, it remains to be seen whether Stop & Shop can adapt and thrive amidst these challenges. For now, shoppers in affected areas will need to seek alternative stores, and employees will navigate the transition to new positions within the company.
In the face of these closures, Stop & Shop’s future hinges on its ability to reinvent itself and offer compelling value to consumers. The company’s commitment to “strong promotions” and competitive pricing will be critical as it strives to regain the trust and loyalty of its customer base.
