Save A Lot completes transition to wholesale model

Save A Lot has completed a transition that it said will position the company for growth.

The discount grocery chain announced the December completion of its ongoing re-licensing 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.  (Save A Lot will retain 18 stores in its home market of St. Louis as a test market for new innovations and programs.)

“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, executive VP and CFO. “This re-licensing 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 completion of the transition dovetails with the company’s recent appointment of Leon Bergmann as CEO, effective February 21.

“Incoming CEO Leon Bergmann brings significant wholesale and grocery experience that is ideally suited to lead this model,” said Justin Shaw, chairman. “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.”

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

Additionally, Save A Lot welcomed 15 new ownership groups, including Yellow Banana, a portfolio company of 127 Wall Holdings, which purchased 38 stores across five states, and Ascend Grocery, which purchased 33 locations in Florida.  

With approximately 900 stores in 32 states, Save A Lot said it believes that operating a pure wholesale model will provide its 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. Recent store conversions have been met with enthusiasm by customers and media within the local communities they serve, the company said.

The re-licensing effort builds on Save A Lot’s ongoing efforts to modernize, working with its independent license owners to remodel all stores by 2024. The new store design reflects the contemporary evolution of the brand with a lighter, brighter and easier-to-shop footprint that includes new décor and an enhanced shopping environment. Local operators completed remodels of 200 Save A Lot stores in 2021.

The transition also incorporates a series of business and brand development efforts, including the launch of Save A Lot’s multi-tiered marketing and branding 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. It also included a refresh of Save A Lot’s logo and updated packaging for over 55 private brands carried at Save A Lot locations.