Stop & Shop, the regional chain of more than 400 supermarkets, has agreed to acquire King Kullen, one of Long Island’s oldest chains of food retailers. The deal, which includes King Kullen’s 32 supermarkets, five Wild by Nature natural food stores and the 88-year-old grocery company’s corporate headquarters in Bethpage, is expected to close sometime in the first quarter of the year.
Details of the transaction were not immediately available, and the purchase is subject to the usual regulatory approval. Food Partners LLC provided financial and strategic advice to Stop & Shop on the transaction; J.P. Morgan advised King Kullen.
“Our family has been in the grocery business for 88 years,” said King Kullen Co-President Brian Cullen, whose father, Michael, opened the Long Island chain’s first store in 1930 on Jamaica Avenue in Queens. “Recently, we determined that the best option for our family was to merge King Kullen into Stop & Shop.”
The chain had resisted other such offers throughout its history, including overtures by Gristedes Brothers and First National Stores in the 1960s.
The chain’s expansion began in 1933 when Michael Kullen bought Trump Market from President Donald Trump’s father, Fred. At its height in 1980, the grocery retailer had 53 stores, 31 of which were in Suffolk County. King Kullen has one store on Sunrise Highway in Rockville Centre. Stop & Shop has locations in nearby Baldwin and Oceanside, among the Nassau locations.
Quincy, Mass.-based Stop & Shop is a regional chain with stores in Connecticut, Massachusetts, New Hampshire, New York and Vermont. With more than $3 billion in annual sales, it was founded by the Rabinovitz family as the Economy Grocery Store in Sommerville, Mass., in 1914, changing its name to Stop & Shop during World War II. The company was acquired in 1996 by Royal Ahold NV and is part of the Dutch supermarket company’s Ahold Delhaize USA Company subsidiary.
The Cullen family retained control of the chain throughout its history. The Cullens took the company public in 1961 but bought it back in 1983.
“This transaction underscores our commitment to further strengthen the positions of our great local brands in the U.S., both through organic growth and through fill-in acquisitions’,” said Ahold Delhaize CEO Frans Muller in a statement.
According to Food Trade News, an industry monthly, Stop & Shop currently accounts for roughly 35 percent of sales among Long Island supermarkets and is the largest local grocery retailer in the area. Food Trade estimated King Kullen’s share of the $10 billion local grocery business at 5.6 percent. As recently as 2014, King Kullen was the second-largest grocery retailer on Long Island, with 42 stores and more than 8 percent of market share.
Food Trade reported that King Kullen has struggled in the past five years as other local grocery chains, such as Shop Rite, muscled in on its traditional retail channels. In addition, the company has not kept up with capital expansion, having opened no new stores or renovated existing ones, according to industry analysts.
The current deal is King Kullen’s second with Stop & Shop. In 2011, King Kullen sold its three Staten Island stores to Stop & Shop, as the chain completed its withdrawal from the New York City market. The current transaction is the second large restructuring of the Long Island grocery business in as many months. In November, German grocery giant Lidl announced the buy-out of Best Markets.