Dive Brief:

• The Indiana Grocery Group — which includes members of the Strack and Van Til families among others — has bought 20 Strack & Van Til stores out of bankruptcy from grocery wholesale cooperative Central Grocers, according to The Shelby Report.
• The Strack & Van Til stores had long been a family-run grocery operation in Northwest Indiana before selling to Central Grocers in 1997, according to the Northwest Indiana Times.
• Jewel-Osco, a subsidiary of Albertsons Cos. and the largest Chicago-area grocer, had originally put in a $100 million “stalking horse” bid to buy 19 of the stores, but lost out to the family-run group for an undisclosed amount.

Dive Insight:

It’s back to the future for Strack & Van Til stores. The founding families once again own the banner and 20 stores that were sold to Central Grocers two decades ago. Strack & Van Til president and CEO Jeff Strack, who already owned 10% of the Highland, Indiana-based chain, orchestrated the buyback. It is expected to close next Tuesday.

“We won. We are getting our stores back…The Strack and The Van Til families are excited for the opportunity to continue to serve the communities of NWI as we have for over 80 years…We are Indiana Made.” Strack wrote in an email to the Northwest Indiana Times.

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Now it’s back to business and a return to its local roots for Strack & Van Til. Still, an uphill climb is likely. The industry’s struggles, which led to the eventual demise of Central Grocers, are hard felt across the grocery industry. It’s easy to imagine a scenario where Strack & Van TIl stores operated by Jewel-Osco and parent company Albertsons, with its deep pockets, may have had a better shot at remaining competitive and surviving in an intensifying grocery environment.

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Many small chains and independent operators these days face what’s considered almost insurmountable challenges. E-commerce giants like Amazon are encroaching on a space that was once brick-and-mortar exclusive — an issue that is certain to intensify with the e-tailer’s planned takeover of organic and natural retailer Whole Foods. Consumer demand for experiences that are both high-end in terms of grocery and hyper-convenient in terms of shopping are pressuring retailers to make hefty investments in store remodels and in-store tech. Price-competitive Aldi is aggressively expanding and Lidl has arrived.

The new Strack & Van Til stores can be successful if they are up for the challenge. The reconstituted retailer first needs to win back shoppers who may have abandoned it under Central Grocer’s reign and bankruptcy stint. It also should play up its local community roots, since it’s been a Northwest Indiana regional operator for 80 years after all. Taking a page from retailers like H-E-B and Wegmans could serve it well. These regional grocers have what it takes to succeed — and quite possibly so can Strack & Van Til again.

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