Foodtown (United States)

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Foodtown
Retailers' cooperative
Industry Grocery
Founded 1935
Products Bakery, dairy, deli, frozen foods, grocery, meat, pharmacy, produce, seafood, snacks, liquor
Website Foodtown.com

Foodtown is a northeastern United States supermarket cooperative founded in 1935 by Twin County Grocers, Inc. Currently, there are 55 Foodtown stores; 17 in New Jersey, 33 in New York and 5 in eastern Pennsylvania. Foodtown's corporate offices are located in Iselin, New Jersey.

Like its competitor ShopRite, each Foodtown is independently owned and operated with some owners operating multiple stores. Foodtown also does business with independent grocers that do not operate under the store banner; they contract with these stores to carry Foodtown-branded items in their stores.

History[edit]

In the 1980s and 1990s, Foodtown was a major player on Long Island and in New Jersey. At the height of its success in 1994, Foodtown's Twin County Grocers, the chief supplier headed by Martin Vitale, who also served as CEO of the cooperative, supplied 165 Foodtown stores and had wholesale revenue of over $1 billion. About a third of those stores were operated by Mayfair Supermarkets, Inc. and Melmarkets Inc., who were the two largest members of the cooperative.

As the 1990s wore on, however, the cooperative was dealt two massive blows that nearly resulted in the total demise of the Foodtown chain. During this period, members of the corporate hierarchy were found to have been embezzling money from the cooperative. The resulting scandal grew and grew, but was largely kept under wraps despite the damage to the overall fiscal health of Foodtown that the embezzlers, which included Vitale, were doing.

As bad as that may have been for Foodtown's bottom line, a 1995 transaction resulted in even more revenue being lost. Ahold, the Dutch supermarket chain, agreed to buy both Mayfair Supermarkets and Melmarkets from their former owners. After a brief turnaround the forty-five stores that had been controlled by the two companies were coverted to Edwards Super Food Stores as part of Ahold's plan to expand its footprint in the northeastern United States, a market that they had not aggressively pursued; the Melmarkets and Mayfair acquisitions were the first in a series of moves that eventually led to Ahold's Stop & Shop gaining a significant presence in a market area it had abandoned in the early 1980s.

Three years later, after the damage from the lost stores and continued malfeasance of the administrators, Foodtown declared bankruptcy and the depths of the scandal were made public. Following these events, many Foodtown stores converted to other banners or simply closed. The closures included the remaining six stores owned by cooperative CEO Martin Vitale;[1] Vitale previously owned a store in Saddle Brook, New Jersey, that closed well before the bankruptcy. In 2004, Foodtown closed its warehouse; it now is serviced by various wholesalers. The cooperative is still responsible for negotiating with suppliers, Foodtown advertising, promotions, and marketing programs.

Since the late 1990s, Foodtown has shown a resurgence, opening five stores in Pennsylvania and bringing stores, which left the cooperative following the scandal, back into the fold. In addition, many of the existing members have expanded and/or remodeled their stores.

Foodtown operated a total of 66 stores at the height of their resurgence, but the number has since dipped to 55. Of these stores, 17 of them are concentrated in New Jersey, 33 in New York, with 5 in eastern Pennsylvania. As noted above, the Foodtown store brand is also available in various independent grocery stores that contract with the cooperative's wholesalers.

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