Smith's Food & Drug Centers, Inc. was founded in 1911 in Brigham City, Utah, United States by Lorenzo J. Smith. Now a subsidiary of The Kroger Company, it is a prominent regional supermarket chain operating in the Southwest, Northwest, and Tennessee. After completing a merger with Portland-based Fred Meyer in 1997, Fred Meyer was in turn acquired by Cincinnati-based Kroger in 1999, making Kroger the largest supermarket chain in the United States. Smith's headquarters are in Salt Lake City.
History
Beginning
Smith's began in 1911 when Lorenzo J. "Ren" Smith opened a small dry goods store in Brigham City, Utah. It was replaced with a larger store across the street in 1922, and renamed "Smith & Son's Market" in 1932. When his son Dee Glen Smith joined the business after serving in World War II, he began immediately expanding it.
The company's growth ramped up significantly from 1946 onward. It changed its name to Smith's Super Markets in 1952. When Dee Smith took over as president upon his father's death in 1958, he discovered Brigham City was saturated, and felt the only option was to expand to other markets. Through partnerships and acquisitions Dee Smith built the company, until his death at age 58 in 1984. Later, Dee's son Jeff Smith became Chairman and CEO of Smith's. In 1989 the company completed its initial public offering and shares of the company started trading on the New York Stock Exchange.
In Idaho in 1989, Smith's exited the once successful Boise, Idaho market after the Boise City Council refused approval for Smith's to open a large store in the city. Smith's attempted to re-enter the Boise market in 1996. However, numerous delays and the 1999 Kroger-Fred Meyer merger forced Smith's to halt construction on its sixth planned location indefinitely. In the early 1990s, Smith's attempted a major expansion into the Southern California market which was completely unsuccessful and resulted in Smith's accumulating nearly $500 million in debt.
Acquisitions
Fred Meyer
In 1997, the company and its parent, Smith's Management Corporation, were acquired by Fred Meyer of Portland, Oregon, for about $700 million (equivalent to $1.04 billion in 2016) in stockâ€"a handsome return on Ren Smith's original investment of 86 years earlier. The deal that created a supermarket and general merchandise chain with 374 stores in 17 western states. Under the terms of the agreement, Smith's shareholders received 1.05 shares of Fred Meyer common stock for each share of Smith's common stock, or about $45 a share. Fred Meyer also assumed $1.3 billion (equivalent to $1.94 billion in 2016) in Smith's debt, which was accumulated largely from a recapitalization that was led by the Yucaipa Companies of Los Angeles.
Kroger merger
In 1999, Fred Meyer was acquired by The Kroger Company in a deal that would create a supermarket giant with $43 billion (equivalent to $61.82 billion in 2016) in annual revenue and 2,200 stores in 31 states. As a result of the Kroger-Fred Meyer merger, most Smith's Food & Drug Centers in Arizona were rebranded as Fry's Food and Drug. Kroger paid about $8 billion (equivalent to $11.50 billion in 2016) in stock for Fred Meyer and assumed $4.8 billion (equivalent to $6.90 billion in 2016) of the company's debt, further consolidating the grocery business and creating the largest supermarket chain in the country. With the transaction, Kroger regains the spot it lost to Albertsons Inc. as the nation's largest supplier of eggs and milk. The acquisition gave Kroger the status of the nation's largest supermarket company, stretching from the fast-growing Western markets, where Portland-based Fred Meyer is strong, to the Midwest and the Southeast, where the Cincinnati-based company has many stores and much visibility. The move gave Kroger even greater purchasing power and substantial economies of scale.
Smith's Marketplace
In April 2004, Kroger merged Fred Meyer's Utah operations into Smith's. Five Utah Fred Meyer stores were converted to the new Smith's Marketplace banner in June of that year. The other Utah Fred Meyer stores located in Ogden, West Valley City, and Sandy were closed in April 2004. Earlier, Fred Meyer had closed a full-service store located in Orem that failed to meet expectations. Smith's Marketplaces contain a full-line food and drug store, with a full assortment of general merchandise, and Fred Meyer Jewelers.
On November 12, 2008, Smiths opened a new construction Smith's Marketplace Store in Lehi, Utah. The store is 170,000 square feet (16,000Â m2) and includes the full array of departments including grocery, apparel, and home. In 2008, Smith's also remodeled the former Fred Meyer Store located at 500 East and 500 South in Salt Lake City. On July 16, 2014, Smith's opened a new Smith's Marketplace in Los Alamos, New Mexico. In November 2014, Smith's opened up its seventh store in North Ogden. On December 3, 2014, Smith's opened up its eighth store in West Jordan located off of 7800 south and the Mountain View Corridor. The Smith's company planned to open its ninth Marketplace store in Kaysville, later in 2015, another in Daybreak later in 2016, another in Woods Cross in November 2016, and then another in Springville in April 2017.
See also
References
External links
- Official website
- Kroger (official website)
- Funding Universe: Smith's history
