Food Lion and Martin's set to merge - NBC12 - WWBT - Richmond, VA News On Your Side

Food Lion and Martin's set to merge

RICHMOND, VA (WWBT) -

European based grocery chains Royal Ahold and Delhaize Group, parent company of Martin's and Food Lion grocery stores, announced Wednesday morning their intention to combine their businesses into a new company, Ahold Delhaize.

The merger will create the sixth largest food retailer in the United States. Combined, the two companies have more than 6,500 stores and 375,000 employees worldwide.

"This is a true merger of equals, combining two highly complementary businesses to create a world-leading food retailer. The transaction delivers a compelling value proposition for our shareholders, a superior offering for our customers and attractive opportunities for our associates," said Jan Hommen, Chairman of Ahold, and Mats Jansson, Chairman of Delhaize.

"Ahold Delhaize aims to increase relevance in its local communities by improving the value proposition for its customers through assortment innovation and merchandising, a better shopping experience both in stores and online, investments in value, and new store growth," said Frans Muller, CEO of Delhaize.

Shoppers in Richmond currently have lots of options when it comes to grocery stores. With two of the biggest chains in town merging though, that might be changing.

Martin's is currently the number one grocery store in Richmond in terms of sales, but only slightly. This past year, Walmart passed Food Lion as the number two grocery store, leaving Food Lion at number three and Kroger at number four.  It's this intense competition from these large national chains that likely motivated the owners of Food Lion and Martin's to merge and grow their geographic footprint.

Richmond is one of the locations, however, where there are a large number of both Martin's and Food Lions, some very close together.

"There's a fair amount of overlap and with that overlap it's likely that with the stores that each of those groups hold, some of those will have to be spun out," said Dr. Adam Marquardt, Associate Professor of Marketing at the University of Richmond. That means some stores could be closed down and sold to other companies.

The other big question, will Food Lion and Martin's remain separate brands or will they congeal into one? According to Professor Marquardt, merging the two brands may be the wise business decision. “I think in the long term it might make more sense for them to think about building a national brand as they try to extend,” said Marquardt.

Some shoppers like Latasha Wiggins are very loyal to either Food Lion or Martin's and don't want to see the two become the same thing.

“They need to keep the prices low for me and everybody else coming to Food Lion. They need to not merge. They need to not take away my Food Lion. I need my Food Lion!” said Wiggins.

According to representatives at both Food Lion and Martin's, customers can expect things to remain the same until the merger is finalized sometime in mid-2016. After everything is final though, it's hard to believe we won't see some changes.

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