Tops-Price Chopper merger: What will it mean?

Joseph Spector Mario Marroquin
New York State Team

ALBANY -- Tops Markets was founded in the early 20th century in Niagara Falls. Around the same era, the Golub family was establishing the Price Chopper brand on the other side of the state in the Albany area.

Now, a century later, the two venerable supermarkets are planning to merge, making it by far the largest grocery store chain in upstate New York with nearly 300 stores and 30,000 employees that extends across the Northeast.

The merger announcement earlier this month is aimed at developing an economy of scale for the two companies battling an ever-changing grocery landscape.

It could bolster their buying power as they try to fend off Trader Joe's, Whole Foods, Wegmans and aisles of food and staples sold at big box stores like Target and Walmart, as well as growing online sales from Amazon and others.

The Tops market on Liberty Street in Penn Yan. A planned merger between Tops and Price Chopper would result in by far the largest grocery chain in upstate New York.

"This transaction bodes well for our teammates, our customers and the communities we serve as it fortifies our base of operations in New York state, providing us the scale with which to sharpen our competitive edge," Mona Golub, a spokeswoman for Price Chopper, said.

Still, the deal raises questions about what happens next for the two well-known chains that have faced years of financial uncertainty in a crowded industry.

And it comes as the COVID-19 pandemic continues to wreak havoc on the economy, disrupting supply chains, forcing more purchases online, but at the same time helping supermarkets' bottom lines as more people eat at home.

Tops has had a variety of owners in recent decades and emerged from bankruptcy in 2018 after accumulating more than $700 million in debt, leading to store closures and keeping it in the hands of private equity firms.

Price Chopper, meanwhile, has remained family-owned and has continued to convert its stores into more updated Market 32 stores, now numbering nearly 30.

Tops is unionized. Price Chopper is not, and the split, as well as a likely quest for savings from the merger, has raised concern within the UFCW Local One, which represents 10,000 Tops workers.

"You got to assume with a merger, your goal is to streamline your administration and streamline your labor costs," the union's president Frank DeRiso said. 

He said he's concerned the stores may be packaged and ultimately sold.

"I’d like to be optimistic, but I really can’t be until I sit with the new company or whatever the board is to see what their positions are and what their intentions are," DeRiso said.

What the merger of Tops and Price Chopper means

Tops and Price Chopper insist customers and staff will see no immediate changes. The deal is expected to close in the coming months, pending regulatory approvals.

They are not planning any layoffs or store closures and have no eye on any expansions, just solidifying their current operations and stores. The store names are expected to stay the same.

Golub said the companies see an opportunity to join brands and become a larger regional force.

And the stores have little overlap. 

Tops, based in Williamsville, Erie County, is mainly in western and central New York, with some in the Adirondacks, while Price Chopper is largely in central New York, the Albany area and the Hudson Valley. Tops has 162 grocery stores, and Price Chopper has 130.

Tops Markets also extends into Pennsylvania and Vermont, while Price Chopper goes into the Scranton area in Pennsylvania and into Vermont, Connecticut, Massachusetts and New Hampshire.

"Both companies decided, given the large regionals, multi-regionals with which we compete, that growing scale was integral to our continued success," Golub said.

"It gives us a bigger voice, it gives us a better seat at the table, better ability to compete when negotiating for goods and buying power — even service contracts and technology.

"All of it creates not only value for customers, but a better shopping experience."

What the industry thinks of the merger

Analysts said the merger is to be expected among traditional grocery stores trying to fend off a growing list of competitors.

E-commerce is likely the biggest threat, and mergers can help existing stores expand their footprint, said Ken Fenyo, an analyst at Coresight Research, a Manhattan-based firm.

"Over time, we believe smaller grocery chains will be forced to merge with larger players to stay competitive," he said in an email.

He said the new Price Chopper and Tops will likely "focus on improving its competitive position in its existing markets versus looking to expand into new markets."

The price of grocery items continues to be a challenge for regional chains battling to win consumer loyalty in the face of national players, such as Kroger, Albertsons and Walmart, said Corey Chafin, a principal at Kearney, a Chicago-based consulting firm.

He said Tops and Price Chopper would benefit from being able to consolidate supply chains, broaden suppliers, enhance customer loyalty programs and building stronger e-commerce programs.

And they can do it without having to impact their brands, Chafin said in an email, adding that they will have to grow their online shopping presence amid COVID.

He said "the pandemic has proven that grocers must succeed not only in their physical retail outlets, but also online and with delivery to doorsteps."

Joseph Spector is the Government and Politics Editor for the USA TODAY Network's Atlantic Group, overseeing coverage in New York, New Jersey, Pennsylvania, Maryland and Delaware. He can be reached at or followed on Twitter: @GannettAlbany