Hard times eating away at grocers

By Abigail Curtis, BDN Staff
Posted Dec. 03, 2008, at 9:13 p.m.

BANGOR, Maine — The bad economy appears to have eaten its way into the food business in Maine. The 22-year-old Shaw’s Supermarket near the Bangor Mall is scheduled to close on Jan. 31, and an unspecified number of jobs will be eliminated from the Hannaford Bros. corporate headquarters in Scarborough.

“It’s not good news,” Judy Chong, director of communications for Shaw’s Supermarkets Inc., said Wednesday.

Chong would not give too much information about why the Shaw’s will close, but did say that the economy is involved.

“It would be fair to say that when you evaluate the landscape, the current economic conditions would be one factor,” she said.

The supermarket chain is based in West Bridgewater, Mass., and operates 200 Shaw’s and Star Markets stores throughout New England.

The Bangor store’s 120 employees received the news on Tuesday.

Chong said that the company’s human resources department is working with the employees to place “as many as possible” in the Main Street Shaw’s in Bangor and the Shaw’s in Ellsworth.

The company’s plans to build a new store on Stillwater Avenue in Bangor have been “placed on hold,” she said.

News of shutdowns and cutbacks may not be surprising given the tough economic climate, but the most recent monthly sales figures from the U.S. Department of Commerce seem to show that grocery store sales in the U.S. are a rare bright spot. Grocery store sales in October increased 4.7 percent over October 2007, according to the department’s figures.

“In comparison with other retailers, grocery stores probably are recessionproof,” Hannaford Bros. spokesman Mike Norton said Wednesday. “But grocery stores are a competitive business.”

Norton, whose company just offered “voluntary resignation” to all 750 employees at its corporate headquarters, said Hannaford is working hard to maintain its competitive edge.

“This certainly has something to do with the economic environment. It also has to do with being positioned well for the future,” Norton said.

The company isn’t saying how many jobs will be eliminated altogether. The voluntary resignation program will offer severance packages based on tenure.

Norton said the corporate restructuring will have no impact on more than 27,000 workers at the company’s 167 retail stores in Maine, Massachusetts, New Hampshire, New York and Vermont. Nor will there be reductions in trucking and distribution divisions.

“We know we need to have a lower cost structure at the corporate office,” Norton said. “Once we start moving through with it, it’ll be good. It’ll be good for the company in the long run.”

Curtis Picard, executive director of the Maine Merchants Association, said that grocery stores have tight profit margins and that while a competitive marketplace tends to keep prices down for consumers, it can be hard on the stores. He said the advent of discount grocers in the area — such as the Wal-Mart Supercenter in Brewer — might be having an effect on other grocery stores.

Wal-Mart Stores Inc., the world’s largest retailer, is planning to open a new supercenter in Bangor next year. The company reported in November that its third-quarter earnings increased 9.8 percent to $3.14 billion from the same quarter last year and attributed some of that jump in sales of food at Sam’s Club and the supercen-ters, which sell groceries.

Phil Serghini, the public affairs manager for Wal-Mart Inc. in Maine, said people shouldn’t have to worry that the Bangor Wal-Mart’s current location near Shaw’s on Springer Drive will become a “dark store” after the supercenter opens off Stillwater Avenue.

“The story is, we have a buyer lined up at this stage,” he said, declining to identify it. “We still have to close on the deal, but the buyer’s been on board a couple of years now, actually.”

After Shaw’s Springer Drive store closes, there still will be 22 Shaw’s Supermarkets in Maine, Chong said. It is the only Maine store currently slated for closure, although the company has chosen not to renew a lease on a Connecticut store, too.

According to the Bangor assessor’s office, the Shaw’s building is owned by Frost and Webber of Bangor, which did not return calls to the BDN on Wednesday.

The Associated Press contributed to this report.

acurtis@bangordailynews.net

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http://bangordailynews.com/2008/12/03/news/bangor/hard-times-eating-away-at-grocers/ printed on July 25, 2014