Joe Darrenkamp says there’s no single reason why he and his brothers decided to get the family out of the supermarket business after 86 years.
No, there’s a bunch of them, combining to shrink profits and expand the owners’ workweeks.
“The grocery industry isn’t getting any better, between the online shopping and the home delivery and all the competition moving into the county,” said Darrenkamp, the company’s president, on Wednesday.
“It’s getting tougher and tougher. We work harder and longer than we ever have, and we make less money,” he said.
The three brothers announced Tuesday evening that they will close their four-store Darrenkamp’s supermarket chain in early November, idling all of its 690 employees.
The company has agreed to sell its biggest store, at Willow Valley Square along Willow Street Pike, to Giant Food Stores, the county’s largest supermarket chain, as measured by revenue here.
Giant plans to quickly remodel the 51,600-square-foot store and reopen it before the crucial Thanksgiving holiday. Giant declined to say how many employees it will hire; Darrenkamp’s has 220 there.
Carlisle-based Giant made no promises about hiring any of the Darrenkamp’s employees, just saying that Darrenkamp’s employees “will have the opportunity to interview with Giant.”
Giant already has eight stores here employing 1,300 people and generating $319 million in revenue a year, or 22.3 percent of the $1.43 billion spent in food stores here, industry publication Food Trade News says.
But none of them are south of Lancaster City, like the Willow Valley Square store in West Lampeter Township is.
Giant spokesman Chris Brand on Wednesday declined to specify what the renovations will include, what they will cost or whether Giant hopes to expand that store. He did say Giant has no plans at this time to pursue a liquor license for it.
Asked why Giant is interested in the Willow Valley Square store, the Giant spokesman reiterated a statement Tuesday from President Nicholas Bertram:
“We are thrilled to continue our renewed commitment to the greater Lancaster market and our relentless focus on growth.”
Other Giant investments
Bertram referenced Giant’s announcement in June that it’s investing $22 million here by remodeling four stores, launching an e-commerce hub in its former North Reservoir Street store and opening a gas station in Lititz.
Bertram added that Giant will support the same charities that Darrenkamp’s backs: A Week Away Foundation, Grace Church, Brighter Day Foundation, Lancaster South Rotary and Willow Street Fire Company.
Besides the Willow Valley Square store, Darrenkamp’s also has stores in Mount Joy, Elizabethtown and Etters, York County.
In advance of the shutdowns, Darrenkamp’s has begun a liquidation sale of all its inventory. Store hours at all locations will be reduced to 8 a.m. to 7 p.m., starting Monday.
Darrenkamp’s sudden announcement left numerous longtime customers disappointed.
One of them, Dawn Leaman, 39, who lives off Millport Road, has been a regular shopper at the nearby Willow Valley Square store since she got married 17 years ago.
“I will miss it,” she said.
Leaman, a mother of five, likes its selection of vegetables, meats and deli items, as well as its “community feel.” She and her children also enjoy its customer service, including welcoming her kids with free treats.
Leaman remembers the time when Joe Darrenkamp went out of his way to help her comfort her crying child. “He came up and gave my kid a cookie,” she recalled.
Darrenkamp’s is not the only chain of its kind to struggle in the current business environment.
Jeff Metzger, publisher of industry newspapers Food Trade News and Food World, sees Darrenkamp’s plight as part of “an accelerating trend.”
“It’s tough for the little guys,” he said. “The field is very crowded, with a lot of diverse options” for consumers.
Consumers not only can buy food at supermarkets, noted Metzger, but also at club stores, convenience stores, discount stores, drug stores and dollar stores. They also can order online and get their order delivered to their door.
Many of those competitors have far deeper pockets and staffs than small, family-owned businesses, he pointed out, making it easier for them to launch new initiatives or upgrades.
That’s certainly the case in Lancaster County.
The new competitors
Darrenkamp’s said its stores are far enough from the well-funded, savvy newcomers not to feel a direct impact — but not far enough to shield it from an indirect impact.
“What it does is, it sharpens up everybody’s pencil. It makes everybody else more aggressive. We have to be competitive, so we’re more aggressive and selling things at a loss just to attract people,” said Darrenkamp.
Then there’s extra pressure on profits from rising medical-insurance costs and wages, he said.
Darrenkamp said the business has remained profitable, but progressively less so. He declined to disclose its annual revenues. Metzger estimated them at $60 million to $65 million.
Darrenkamp said the decision to close was sparked a year ago, when the brothers were approached by Giant. Talks heated up in recent months.
That led to the “bittersweet” decision by Darrenkamp, 59, and brothers Dave, 63, and Larry, 65, — the fourth generation in the business — to sell.
There’s relief from knowing that seven-day workweeks and anxiety about the future will soon be over, he said, but there’s pain from seeing the reaction of employees and customers.
The brothers broke the news to their employees in a meeting Tuesday evening.
“Last night was so sad,” said Darrenkamp. “Letting our people know we were closing, there were definitely a lot of tears in the room.”