- Lancaster, Pa.-based, family-owned grocer Darrenkamp's is closing its doors after 86 years in operation. The grocer plans to liquidate immediately and will shut the doors of all four of its stores in early November.
- The grocer will sell one of its store locations to Ahold Delhaize-owned Giant Food. Employees at Darrenkamp's will be given the opportunity to interview for similar positions at the new Giant Food location and existing ones in the area.
- “This was a very difficult decision because we will miss serving our neighbors and because of our long history serving the Lancaster community for so many years,” said co-owner Dave Darrenkamp in a statement. “Knowing how this affects our customers and employees made the decision even tougher.”
It is the “end of an era,” as local news reports have referred to it. Like many independent grocers, Darrenkamp’s relied heavily on the community to keep its doors open. And like many independents, the Lancaster County grocer faced intense pressure from from new rivals along with rising costs.
"We put pharmacies in our stores. We put beer cafes in our store to keep up with expansion. We've made expansions. We've been into different market areas," Dave Darrenkamp told Food Dive. In the end, though, these initiatives couldn't save the company in an increasingly competitive market.
As grocers like Wegmans, Giants, and Whole Foods move into Lancaster, independent grocers like Darrenkamp’s are being pushed out. These smaller grocers offer consumers specialty goods and a more personalized experience. However, getting consumers in the door was the hard part, Darrenkamp noted.
Darrenkamp said one of the biggest pressures of late was keeping up with e-commerce. He said his stores needed about $100,000 each in order to pay for software, trucks, drivers, employees to pick the orders, and equipment like refrigeration. The return on investment might not be there, he noted.
"I don't want to go in debt for another 10 years and the kids don't want to take that on," he said. "I don't think [online shopping] is going to rapidly take off, especially in Lancaster County here. I think it'll be a big niche, but people in Lancaster here are going to want to pick out their own produce and look at their own meat and not just order something online and have it sent. There will be few but not enough to warrant the price you're going to have to charge to do it or to pay for your investment. That's scary to me."
Darrenkamp's is no stranger to change, having evolved from door-to-door sales in the early 20th century to operating fully modern supermarkets. But the accelerating pace of change in the modern era meant the company would also need to accelerate its investments while trying to keep its shoppers from defecting to other grocers.
"We're pushing that age where, you know, we've built it all our lives and it's time to move on," said Darrenkamp. "We're just looking at the future and the competition and the complexity of the whole grocery industry to stay competitive. It's just time to retire and maybe shift gears."
These same challenges have impacted traditional grocers across the country. Southeastern Grocers recently emerged from bankruptcy with a reduced debt load and is rapidly remodeling stores. Tops Markets also filed for bankruptcy earlier this year and is eyeing an exit sometime this fall.
Ahold Delhaize-owned Giant, meanwhile, has made inroads in central Pennsylvania recently. In June, the chain announced a $22 million investment plan for Lancaster County including a 38,000 square-foot e-commerce hub at one of its former locations, four store remodels, price-cuts and a gas station at one of its locations. This plan adds onto the supermarket’s $70 million plan to expand throughout Pennsylvania.
The Darrenkamp's location at 106 Willow Valley Square — just south of town, in a bustling commercial area — is the latest expansion target for Giant. Darrenkamp said the company made a very attractive offer that made the decision to bow out just that much easier.
"The opportunity came with the Giant and they wanted Willow Valley real bad and we said, 'you know what, now's the time boys,'" said Darrenkamp. "It was time to do it and we may not have this opportunity again to go. Let's get out while we still have some health left to enjoy life in the later years."