Meijer No Sale

November 23, 2005
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GRAND RAPIDS — Trade reports are circulating that the United Kingdom’s largest retailer, Tesco, intends to establish a presence in the United State by acquiring a 49 percent stake in privately owned Meijer Inc.

Meijer officials say no way.

The reports are simply not true, said Meijer spokeswoman Judith Clark, director of communications and community relations. Meanwhile, the U.K trade journals persist in reporting that Tesco is poised to acquire a major ownership position in Meijer, and Tesco executives decline to comment. British trade journal The Grocer reported that Tesco is willing to ante up $4.3 billion for the stake in Meijer.

In an internal memo to its employees Tuesday, Meijer management stated: “It’s important for our entire team to know that these rumors are false and that we are not negotiating with any company for the sale of any part of our company.

“Our family is committed to Meijer’s future and to our success. We are excited about our growth plan and are grateful for the great Meijer team members who create the solid foundation of this company.”

The Meijer store chain, founded by Hendrik Meijer in 1934, has grown significantly under the management of Hendrik’s son, Fred Meijer, and grandson, Hank Meijer. The company was among the first to embrace the supermarket concept, and in 1962 was the first store in Michigan to open a one-stop-shopping supercenter, then known as Meijer Thrifty Acres.

Today, Meijer operates 170 supercenters in Michigan, Illinois, Ohio, Indiana and Kentucky. Tesco operates about 2,500 stores in 12 countries in Europe and Asia.

A Tesco-Meijer deal could have a “significant impact” on retailing and store brands in the United States, according to a report by the New York-based Private Label Manufacturer’s Association, because “private label accounts for more than half of Tesco’s sales and the retailer is widely recognized as having one of the most innovative store brand programs in the world.”

Just two weeks ago, CEO Hank Meijer told a crowd at Grand Valley State University’s DeVos Center that his company has had to face the “very brutal” facts of an evolving industry and undertake a lot of painful changes. He said the company also is concentrating more on Meijer corporate brands to differentiate itself from competitors.

“We know we have a long way to go to brand ourselves, especially among new customers,” Meijer said at the GVSU presentation. “When competitors are national or global and have the resources to create their own brands or acquire brands more readily than we do, we have to be more nimble and creative about that than we have been in the past …”    

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