My Giant $2.7 billion sale: Chain whose name meant groceries for many in region couldn't resist global trend.

May 21, 1998

UNLIKE CARS or appliances, selling groceries has been a regional game. A few companies enjoy national recognition, such as Safeway and Kroger, but the industry has many big players known only in their own backyards.

That's why a huge supermarket chain named Giant could operate across the Mason-Dixon Line from another large grocery chain named Giant and shoppers would never be the wiser because they shopped at and identified with their Giant.

Indeed, Baltimore and Washington area consumers identified strongly with Giant Food, Inc., long the dominant supermarket in the region. Although the industry has changed immensely in recent years, with new players and new strategies, many local shoppers felt a twinge of insecurity at this week's news that Royal Ahold N.V. of the Netherlands had purchased for $2.7 billion the chain that the Cohen family began in Washington in 1936. Spokesmen for buyer and seller sought to assure shoppers and 29,000 employees that no dramatic changes are imminent. Analysts said the Dutch firm would be foolish to change drastically the formula that helped Giant succeed and fetch a premium price. The purchaser's immense buying power will help in a trade where the average return on a $100 worth of groceries is a buck.

The history of Giant, begun by Nehemiah Myer Cohen and expanded into 179 stores by his son, Israel, parallels the story across the Atlantic of slightly older Royal Ahold. It, too, began as a family grocer and cookie baker near Amsterdam that swelled into a $26 billion international conglomerate.

Mr. Cohen's post-Depression market suited a sleepy Southern town called Washington. Albert Heijn's fledgling enterprise served Zaandam. The core concepts of customer service, presentation and price remain, even if the stakes have grown a million-fold.

It's still about grocers serving a village -- it just happens to be a global village.

Pub Date: 5/21/98

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