TOPS Hits Bottom in NE Ohio

Blaming failure to be competitive, Dutch retailer Ahold announced this week that it is selling 46 TOPS supermarkets in NE Ohio. According to the company, NE Ohio "is no longer considered a core part of TOPS market area, which is concentrated in New York and Pennsylvania." Ahold will continue to operate 74 TOPS stores in NY and PA.

It's expected that some TOPS stores will easily be sold based on their locations alone. Names have been mentioned, including industry bigs Giant Eagle and Kroger, however, neither company has commented publicly. Already, though, Acme Fresh Market and Fishers Foods have expressed interest in eight Akron-area locations.

The news should not surprise readers of this blog since the demise of TOPS supermarkets in NE Ohio was predicted early in 2005. Alarm bells were ringing throughout 2004 and managers were scrambling to find ways to prop up the bottom line. Stop gap measures such as closing a few of the worst-performing stores, eliminating departments and services, and cutting operating hours all failed to buck up performance. Interestingly, back in January 2005 the company failed to see its real problem. A TOPS spokesperson cited the lack of "customer excitement" as the cause of poor performance rather than inability to better the competition.

Simply put, TOPS' problem has been higher prices when compared to the competition. Competing supermarkets, groceries, and even convenient stores have been undercutting TOPS prices by noticeable margins. Rather than being excited, I contend that customers are usually stunned to see products priced at 20, 50, and even greater percentages higher at TOPS than competing stores in the area.

In April 2005 as the company was trending toward complete failure in NE Ohio, I recommended that TOPS workers "man the lifeboats." It's too late for that action now. About 3,800 TOPS employees in Greater Cleveland, Akron, Youngstown and Norwalk now must aggressively pursue future jobs. Hopefully, new ownership will be able to offer opportunities for those who lose their positions with TOPS.