In late 2017, popular supermarket chain, “Supermarket”, filed for bankruptcy after its owner, “Digger Capital”, bought out its senior lenders. Shortly after purchasing Supermarket, Digger Capital took steps to close down all of the stores, and sell off the land. While many were surprised that Digger Capital would buy out a company with over 60 locations in 18 different cities, it seems that the acquisition was strategic. In addition to Supermarket, Digger Capital also purchased the land where “Chipotle” restaurants stand, and even the McDonald’s and Popeyes restaurants that are located within the shopping center.
Why would a company that owns many different restaurants want to own a supermarket? The primary reason is that supermarkets are known for selling a large variety of food at a cheap price. However, there are other reasons why a company would buy out a supermarket. Here are some of the most common reasons why a company would buy out a supermarket.
Cheap Real Estate
Besides having a large supply of cheap food, supermarkets are also known for their real estate. Supermarkets are generally located in areas with a high demand for food, and high property values. This makes them ideal for a quick sale. In fact, many supermarkets are purchased by real estate investment trusts, and then turned into luxury apartments or condos.
It seems that the demand for supermarkets is only going up. Some industry analysts predict that the supermarket market will grow by 23% over the next five years.
Flexible Lease Deals
Another interesting aspect of supermarkets is the fact that they are generally available for lease. So, if you are looking for a quick route to an investment, you could purchase a supermarket that is currently leased and has a favorable lease term. Most supermarkets have several years left on their lease, and some even have “build to suit” clauses, which give the acquiring party the right to build and furnish additional store space.
These are just some of the reasons why so many people are interested in supermarkets. Once you have decided that you want to purchase a supermarket, the next step is to determine the best location for the store.
Who Did Speedway Buy Out?
As mentioned above, Supermarket filed for bankruptcy after its owner purchased all of the senior lenders. The name of the company that purchased Supermarket is “Digger Capital”, and it is a private equity firm that focuses on buying and turning around food companies.
The chief investment officer of Digger Capital is Richard Gray, and he oversaw the acquisition of the company. He has quite the track record when it comes to buying and running successful food companies. He was previously the chief executive officer of “The Fresh Prince of Bel-Air Buffet”, and “The Rosé Champagne Bar”. Furthermore, Gray has a history of buying companies in the food industry, and then using his experience to turn around those companies. He is known to favor low investment, high risk, fast food restaurant companies.
Gray’s history of buying and running successful food companies makes him a perfect fit for Supermarket. With his expertise in the area, it’s no wonder that he was drawn to the company. It is said that Gray purchased Supermarket because he saw an opportunity to make quick money, and expand his portfolio. Despite the fact that the company was in bankruptcy when he bought it, Gray was able to renegotiate the company’s lease. This allowed him to increase the rent, and use the company’s assets to fund his investment. It is said that he made a large profit off of the sale within a year.
If you’re considering an investment in restaurants, there are some great opportunities out there. One of the most popular outlets in the United States is “Chipotle”. You can learn more about Chipotle here. One of the interesting things about Chipotle is that it was co-founded by three guys who were formerly employed at Blockbuster. The company has successfully navigated the transition from DVD to digital, and continues to offer cheap and delicious food while adopting new ways of providing value to their customers.
What About The Buyouts In General?
It is interesting to note that most supermarket chains that are bought out by private equity firms go bankrupt within a few years. It seems that the demand for supermarkets disappears once the owners start taking large ownership stakes. This often results in the stores being closed down, and the land being sold off for development. In some cases, the company’s restaurants will move elsewhere, and continue to operate under the original name.
What Is The Future Of Supermarkets?
As mentioned above, Supermarket was purchased by Digger Capital in 2017, and since the acquisition, the company has been through a transition. The stores are currently closed, and the employees have been relocated or let go. Supermarket’s primary products are now sold at other supermarkets, and its website has been turned into a car-buying platform.
Other than selling food, supermarkets are now trying to find a way to become digital stores. A few years back, most supermarkets closed down their websites, as shoppers primarily accessed them through their mobile phones. However, today, most supermarkets have reopened their websites, as shoppers prefer to look for what they need online than in a physical store. If your goal is to make money, invest in a supermarket that is owned by a private equity firm.