Sysco/US Foods Mega-Merger Update
It looks like the decision between the Justice Department Anti-Trust Division and the Federal Trade Commission as to who will conduct the review of the proposed sale and merger of US Foods/Sysco Corporation has ended – FTC is the big winner. As they weighed their options we wondered what the options might be for restaurant owners and operators.
Just recently the Wall Street Journal reported that, “Restaurants Fear Clout of a New Food Giant” or so went their headline. They went on to report that the competition between these two distributors was “one of the few weapons they have against the companies’ pricing power”. Sysco rebuts by insisting the merger will “cut costs and improve service, and that its roughly 15,000 local competitors will keep its pricing in check.” We’d love to know if any of you are buying that.
Who among the 15,000 will be able to match the increased buying power of the soon to be merged mega-distributor? Performance Food Group? Gordon Food Service? Reinhart Foodservice? We wonder…
We’re also wondering what will become of the US Foods Chef Stores started back in November 2012? Will wholesale cash and carry and restaurant supply stores in central locations make it less difficult for smaller restaurants and chains to get what they want? They offer case and individual quantities conducive to the small restaurant owner. Combine that with the ever growing farm to table, Locovores, where-does-my-food-really-come-from movement and cash and carries just may be the new foodservice grocery store for staples. Will Smart Foodservice, Restaurant Depot and Jetro move into vogue even more? If you really want to discuss buying power perhaps the big box stores like Costco will advance into the picture.
All these innovative ideas that fall under the category of progressive and committed just might gain momentum through your continued search for the most effective way to conduct your businesses. We’ll keep you posted on the continuing adventures of “mega-merger.”