Reports: Royal Ahold to acquire Ukrop’s stores

NEW YORK Rumors that Ukrop’s was on the sales block seems to finally have come to fruition. And with Ahold being the acquisition partner, this may mark a resurgence of Ukrop’s, known for its close community ties, in its core Virginia markets.

It also may mark a change in two cultural touchstones that helped define Ukrop’s position in its markets — Ukrop’s supermarkets were closed on Sunday and did not sell alcohol. And while the reasoning behind those decisions may be virtuous, the fact remains that in a toughening economy convenience and value become paramount to the consumer, and that conceivably gave a leg up to Ukrop’s competitors who fielded Sunday hours and beer and wine offerings throughout their aisles. Accordingly, Ukrop’s under Ahold’s guidance will soon entertain Sunday hours. Beer and wine sales is expected to be folded into the store’s mix in the next couple of years, once the Ukrop banner is taken down.

The deal also represents a resurgence of sorts for Ahold, suggesting that the Dutch grocer has completely recovered from the financial scandal that roiled its ranks just a few years ago.

In keeping with an Ahold resurgence, many analysts predict that Ukrop’s will be the first of many acquisitions made by the Dutch grocer as it expands its presence into North America. Ahold currently has more than $3.7 billion in liquid assets, and has repeatedly said that a down economy affords numerous takeover opportunities.

Ahold is currently the No. 14 pharmacy retailer in the U.S., with more than $2 billion in prescription sales through 2008, and the No. 4 supermarket pharmacy retailer. According to analysts, Ukrop’s generated approximately $550 million in annual sales. If Ahold is able to replicate pharmacy sales of 9.4%, that would mean an accretive $51 million in prescription sales with more to come through future acquisitions.