Grocery Stores Changing Hands
Posted: January 8, 2016
When Mega Foods closed its grocery store in Chippewa Falls a few years ago, it was apparent to me at the time that Mega Co-op was losing market share to its competitors in the region. The announcement this week that Mega Co-op was selling three of its stores to Gordy's Market, including Mega West in Eau Claire, did not surprise me at all. What did surprise me, though, was that Gordy's Express stores will become Mega Holiday gas/convenience stores once the deal closes in late February.
On the other hand, with gasoline prices being so low lately, it might be that the Schafer family that owns the soon-to-be 24 Gordy's Markets knew that their Gordy's Express stores were not making them as much revenue as when gas prices were closer to $3 per gallon.
There has been much speculation about the impact that Woodman's Grocery Store in the River Prairie Development in Altoona has had on the Gordy's/Mega announcement. I have said all along that I thought Mega Co-op would suffer the most by Woodman's new store. And when I shop on my way home at the Gordy's Market on Birch Street in Eau Claire, it appears that the neighborhood grocery store has retained much of its business despite the new Woodman's store being in close proximity.
I was most intrigued by the announcement in the companies' news release that stated that the deal will allow each company to focus on their primary business. Apparently, even though Mega Co-op owned and operated four grocery stores, including stores in Barron and Whitehall, their main business has been the Mega Holiday division for many years.
I made the executive decision in 2014 to cut my ties with Mega as the major sponsor of Festival in the Pines. In fact, the week before the 2014 event, I made an appointment to meet with the Schafer family to discuss their interest in becoming my major sponsor. Fortunately, Gordy's Market has been a great company to work with and I look forward to many more years of continuing our business relationship.
The closure of the Mega East store in Eau Claire was quite surprising since that store is so new. However, with the $6 million store ending up costing the Eau Claire Cooperative Association $9 million, it's not surprising that closing the store was in the best interests of management. I just hope that the number of people that lose their jobs as a result of the deal is minimal.