Marsh Supermarkets

Marsh Supermarkets, Inc.
Private
Industry Retail (Grocery)
Founded 1931
Headquarters Indianapolis, Indiana
Number of locations
 97
Key people
 Tom O'Boyle, President and CEO
Products Grocery
Owner Sun Capital Partners
Number of employees
 9,000
Website www.marsh.net

Marsh Supermarkets is a retail food chain headquartered in Indianapolis, Indiana, with stores throughout Central Indiana and parts of western Ohio (including metropolitan Cincinnati). Its parent company is Sun Capital Partners, headquartered in Boca Raton, Florida.

History

1931-1959: The Ermal Marsh years

Founded in 1931 in Muncie, the company went public in 1953 and has since grown to 97 locations. Of the 97 locations, 69 are marketed as Marsh Supermarkets, three are O’Malia’s Market and 25 are the MainStreet Market banner. The company's founder, Ermal Marsh, was able to hold together his first store throughout the Great Depression and World War II. After the war ended, Ermal expanded his store into "Marsh Foodliners" and created the first supermarket in Muncie.

In 1952, Ermal had built the first warehouse distribution center for Marsh Supermarkets in Yorktown, Indiana. Within that same year, Marsh stores also introduced their own popular brand of ice cream. In 1953 when the company went public, Ermal had an operation of 16 Marsh Supermarkets.

In August 1956, the first store in the state of Ohio was opened through the acquisition of a pre-existing store in Van Wert, Ohio,[1] and was quickly followed a few months later by the opening of a newly constructed store in Greenville, Ohio, in October.[2]

In August 1959 a horrific plane crash near the city of Logansport, Indiana, took the life of Ermal Marsh. Estel Marsh, Ermal's brother, was then given the title of president of the company.

1959-2006: The Estel and Don Marsh years

Under Estel Marsh, the name of the company was changed from Marsh Foodliners to Marsh Supermarkets in 1960.[3]

Adapting to a rising trend, Marsh Supermarkets decided to open a new wave of convenience stores across Indiana. In 1966, the very first Village Pantry store and gas station was opened.[4]

In 1968 as Marsh Supermarkets continued to grow, Estel Marsh was promoted to Chairman of the Board. This promotion cleared the way for Don Marsh, the then-thirty-year-old son of Ermal Marsh, to step forward as the new president. As president, Don was able to be a front-runner in Marsh's progression and adaptation to new technologies.

One of Marsh's most distinguishing features has been its innovation and early adoption of retail technology.[5] On June 26, 1974, a Marsh location in Troy, Ohio, became the first grocery store in the world to use a bar code scanner. The first item scanned was a ten piece pack of gum.[6]

In early 1994, Marsh introduced a card-based customer loyalty program called the Marsh Fresh IDEA (Instant Discounts Electronically Applied) Card in which discounts are sometimes based on the cardholder's buying habits and are issued immediately for current purchases or as coupons for future visits. The first print mention of this program was in the April 1994 issue of the Indianapolis Recorder[7] and the program was rolled to other marketing areas by November of the same year.[8] In conjunction with this program, Marsh became the first supermarket chain in the region to offer a co-branded Visa card the following year.[8][9][10]

Also, Marsh Fresh Express gave way to grocery home delivery. Through Marsh Fresh Express, a customer can buy their groceries over the phone or internet.

In 1991, major changes came to Marsh Supermarkets. The company headquarters moved to a new location along Interstate 69 in Fishers, Indiana. Marsh also released a new plan to re-format the stores, known as the "Supermarket of the Future" campaign. This new format made Marsh Supermarket stores open 24 hours, seven days a week. Also, a full-service pharmacy was implemented, along with a "help-yourself" style food court which contained food items ranging from salads to sushi, as well as a bagel shop and espresso bar. In store banks were also installed, as well as Fielding's Playhouse for toddlers, a New York Style Pizzeria, and an ATA travel center. The new policy seemed to implement the area it inhabited, the crossroads of America.

As a regional supermarket chain, Marsh tried to support regional suppliers by stocking regional favorites, such as Indianapolis-based Roselyn Recipe,[11] which some of the national chain competitors tend to ignore. Marsh Supermarkets today relies heavily on their "Fresh" standard of goods and services.

Marsh eliminated their smaller Central Indiana competitors by purchasing the eight-unit O'Malia Food Market chain in 2001 [12] and, in two separate purchases, three Mr. D's Fresh Food Markets stores in 2003.[13][14][15] The O'Malia stores were kept as a separate banner that specialized in the upscale food trade. The Mr. D's stores were converted into O'Malia banner.

Marsh made attempts to expand beyond their Indiana-Ohio market to other areas such as Chicago in 2005,[16][17] but were driven out by larger competition in less than a year of operation there.[18][19][20] As competition mounted and growth slowed, Marsh Supermarkets in 2005 began to explore the option of being purchased. In 2006, Sun Capital purchased their first supermarket chain, and returned Marsh Supermarkets to being a private company after 53 years.

2006-2007: Company Scandal

In 2006-2007 company leaders Don and David Marsh came under extensive scrutiny and scandal according to court records filed. David and Don Marsh both and their attorneys defended the claims against them citing improper and lavish spending of hundreds of thousands of dollars on travel-related expenses in recent years—even though it occurred at a time the company was under increasing financial strain.

Fueling the concern was John Elbin, a former Lilly Industries executive who served as Marsh's CFO from July 2005 until quitting four months later because of disagreements with other senior executives. On the way out the door, court filings show, Elbin passed to the board allegations of improper spending.

Until then, the board's compensation committee had been unaware that David and his father, then-CEO Don Marsh, charged expenses to the company using a special executive voucher system outside the normal expense-reimbursement process, former committee chairman Stephen Huse, a restaurateur whose holdings include St. Elmo's Steak House wrote in a statement filed with the court.

In a May 2006 letter to Don Marsh, Huse questioned the CEO's spending more than $279,000 of company money on estate-planning costs for himself and other family members over two years, noting that the limit in his contract for that kind of expense was $10,000 annually.[21]

The company in early 2006 dismissed David Marsh and two of his brothers as part of a broad expense-reduction plan that included store closings. David Marsh contends in the lawsuit that his dismissal should have triggered payments of $738,000 a year for three years—about $34,000 a year more than the company said he was due.

Court records say the board ousted him after he refused to forgo about $1 million in compensation and other benefits in order to make the company more attractive to potential suitors.

Don Marsh countersued, citing severance package benefits to him were improperly withheld by Sun Capital as a result of his ouster. During the trial, numerous examples of lavish personal spending at company expense were revealed in court, company money Marsh spent on wedding gifts for his friends, a $554 Hong Kong tailor's bill from one of Marsh's Asian jaunts, a $4,815 purchase at a diamond shop in Scottsdale, Ariz., on the company credit card. In another example, Marsh would rent his Dominican Republic resort villa to his own company during August and September every year for $495 a day. And he used company money to host frequent company get-togethers at his Saugatuck, Mich., vacation house on the shore of Lake Michigan, where his yacht bore the name "Maison Blanche Research Center". David Marsh also came under scrutiny for lavish spending as well, An African safari that Marsh approved for his son David (then the company's president) and his family. A flight Marsh arranged on the company jet to New York for 14 Marsh family members to catch the Macy's Thanksgiving Day parade.[22]

2006-Present: The Sun Capital years

Marsh store #47 in Lafayette, Indiana, 2007.

Citing increased competition, Marsh announced on November 29, 2005, that it had engaged Merrill Lynch to investigate the possible sale of the company.[23] In April 2006 the company signed a letter of intent to be purchased by an affiliate of Sun Capital Partners, a Florida-based investment firm that specializes in leveraged buyouts. The deal would allow Sun Capital to purchase all outstanding Marsh shares for $11.16 per share, for a total of approximately $88 million.

On September 27, 2006, MSH Supermarkets, Inc., an affiliate of Sun Capital, completed the acquisition of Marsh Supermarkets, Inc. (Nasdaq: MARSA) (Nasdaq: MARSB) (Marsh) for a total purchase price of approximately $325 million.[24][25] Frank Lazaran was appointed President and CEO of Marsh, as a result of Don Marsh's previously announced resignation. At the time of acquisition, Marsh had operated 69 stores as Marsh supermarkets, 38 stores as LoBill Foods stores, eight stores as O'Malia Food Markets, 154 stores as Village Pantry convenience stores, and two stores as Arthur's Fresh Market stores in Indiana, Illinois and western Ohio. The Company also operated Crystal Food Services; Primo Banquet Catering and Conference Centers; Floral Fashions; McNamara Florist and Enflora.[25]

All non-core subsidiaries and excess real estate resulting from closing poorly performing stores were immediately sold off.[26][27] In June 2007, Sun Capital Partners announced that they would be splitting Village Pantry Convenience Stores from Marsh. Village Pantry now reports directly to Sun Capital Partners.[28] LoBill Foods stores were converted into Marsh Hometown Markets around the same time as the Village Pantry separation.[29] Under Lazaran, Marsh replaced most of their well known Marsh store branded products with the higher profit but lesser known Food Club and Valu Time private label brands from Topco.[30] Sun Capital attempted to sell the Marsh in December 2009,[30] but withdrew the offer 8 months later when they were unable to find a buyer.[31] In August 2011, Sun Capital eliminated Marsh's warehouses and internal distribution system and replaced it with an outside third-party supplier.[32]

In May 2011, Frank Lazaran departed as the Marsh President and CEO for family reasons.[33] Sun Capital brought in Joe Kelley as the new President and CEO.[34] Joe Kelley brought over 25 years of experience to Marsh from his past positions at Purity Supreme, A&P, Bozzuto’s, Inc., Adams Hometown Markets and Price Chopper Supermarkets. Kelley left in May 2012 to become president of Stop & Shop's New England Division.[35] Marsh COO Bill Holsworth was appointed as interim CEO as Sun Capital began conducting a nationwide search for a permanent CEO. The search ended in November, 2012, when Marsh named Thomas R. O’Boyle Jr. as the company’s new chairman, president and chief executive officer.[36][37]

In July 2016, Marsh replaced C&S with Supervalu as their primary supplier.[38]

References

  1. ↑ "Marsh Takes Over Rhodes Supermarket". Van Wert Times Bulletin. August 6, 1956. p. 10. (subscription required (help)). It was this morning that the Marsh Foodliners, Inc., took over operation of the market following its purchase last week of equipment and stocks from Pete Rhodes. It was something special for the Marsh firm too. After expanding to the point where it owned 21 supermarkets in Indiana, this marked its first venture into Ohio. The firm has a market under construction in Greenville but that one isn't scheduled to open until this fall. Four others are being built in Indiana, at Fort Wayne, Marion, Anderson and Muncie. Alternate Link via NewspaperArchive.com.
  2. ↑ "Brief Items From Neighboring Towns". Van Wert Times Bulletin. October 24, 1956. p. 3. (subscription required (help)). The Marsh Foodliners, Inc., announced the opening of another new supermarket today in Greenville. This is the second Ohio market now being operated by the Marsh Foodliner firm, according to Ermal W. Marsh, president. Alternate Link via NewspaperArchive.com.
  3. ↑ "Marsh Company Has New Name; State Approves". Anderson Herald Bulletin. August 7, 1960. p. 8. (subscription required (help)). Marsh Foodliners Inc. of Yorktown registered with Secretary of State John R. Walsh Friday under a new name, Marsh Supermarkets Inc. The chain, which operates in Indiana, Ohio, Georgia and the Carolinas, opened its 66th store this week in Bloomington. Seven more are planned within the coming year. Alternate Link via NewspaperArchive.com.
  4. ↑ "In Business Today". Anderson Herald Bulletin. November 27, 1966. p. 31. (subscription required (help)). Marsh Supermarkets Inc., Yorktown, has move into the rapidly-growing "Convenience store" field with the announcement of a new Village Pantry Division... the first store will be built in Muncie. The stores are to be located in Indiana and Ohio in the general geographical area now served by its 63 supermarkets. Alternate Link via NewspaperArchive.com.
  5. ↑ "History of Marsh Supermarkets". Marsh Supermarkets. Archived from the original on 2010-06-12.
  6. ↑ Fox, Margalit (June 15, 2011). "Alan Haberman, Who Ushered In the Bar Code, Dies at 81". New York Times.
  7. ↑ "Marsh Supermarkets ad". Indianapolis Recorder. April 30, 1994. p. 47 – via Hoosier State Chronicles.
  8. 1 2 "Anderson Herald Bulletin October 31, 1995". Anderson Herald Bulletin. October 31, 1995. p. D7. (subscription required (help)). Marsh Supermarkets Inc. and National City Bank, Indiana, announced they will launch the Marsh Fresh IDEA Visa Card Wednesday. The co-branded credit card will combine the benefits of Marsh's existing Fresh IDEA (Instant Discounts Electronically Applied) customer loyalty card with the uses of a Visa card... Marsh is the first supermarket in Indiana to offer a co-branded credit card... Marsh launched its IDEA card in November 1994, and estimates over 400,000 cardholders use it. Alternate Link via NewspaperArchive.com.
  9. ↑ Frazier, Lynne Mckenna (December 4, 1995). "Marsh Stores' Fresh Idea Sees Discount Targeting In The Cards A New Visa Card Has The Potential to Offer Discounts Based on Shoppers' Needs.". Fort Wayne News Sentinel. p. 3B. (subscription required (help)).
  10. ↑ "Marsh offers Visa". Indianapolis Recorder. November 11, 1995. p. 25 – via Hoosier State Chronicles.
  11. ↑ "Marsh Stores to Stock Roselyn Bakery Products". PR Newswire (Press release). November 11, 2002.
  12. ↑ "Marsh to Purchase O'Malia Food Market". PR Newswire (Press release). June 14, 2001. Marsh Supermarkets, one of the country's largest regional grocery chains, operates 70 Marsh Supermarkets, 29 LoBill stores, two Savin*$, and 188 Village Pantry convenience stores in central Indiana and western Ohio. Meanwhile, O'Malia's operates eight stores - four in Indianapolis and four in Hamilton County.
  13. ↑ "Marsh Supermarkets Division to Purchase Two Mr. D's Fresh Food Markets". Progressive Grocer. January 22, 2003.
  14. ↑ "Marsh Supermarkets Inc. O'Malia Food Division to Purchase Two Mr. D's Fresh Food Markets". Globe Newswire (Press release). January 21, 2003.
  15. ↑ "Marsh to Acquire Mr. D's in Bloomington". INside Indiana Business. June 11, 2003. Archived from the original on 2015-04-10.
  16. ↑ "Marsh Supermarkets Readies for Illinois Debut". Progressive Grocer. August 7, 2005.
  17. ↑ Schmeltzer, John (December 24, 2005). "Squeeze of the supercenter: New players bite into market share of traditional grocers". Chicago Tribune.
  18. ↑ "Marsh Closing Naperville Store; Angelo Caputo's Assuming Lease". Progressive Grocer. July 12, 2006.
  19. ↑ "Marsh closing its only store in Illinois". Indianapolis Star. July 7, 2006.
  20. ↑ Murphy, H. Lee (August 5, 2006). "Local grocery chain's gain". Crain's Chicago Business.
  21. ↑ Andrews, Greg (June 11, 2007). "Ex-Marsh exec says ousted president asked him to inflate profit". Indianapolis Business Journal.
  22. ↑ Swiatek, Jeff (February 26, 2013). "Supermarket CEO spent lavishly, trial reveals". USA Today.
  23. ↑ "Marsh Supermarkets, Inc. Announces Loss of $3.4 Million for Second Fiscal Quarter, Engagement of Financial Advisor, Intention to Explore Strategic Alternatives and Other Developments". PR Newswire (Press release). November 29, 2005.
  24. ↑ "Sun Capital Partners Affiliate Completes Acquisition of Marsh Supermarkets: Frank Lazaran Appointed Marsh's New President and CEO; Don Marsh Resigns". PR Newswire (Press release). September 27, 2006.
  25. 1 2 "(PZ) Marsh Supermarkets Reports on Competing Transaction". Houston Chronicle. June 12, 2006.
  26. ↑ Schouten, Cory (December 4, 2006). "Crystal Food Services to go national". Indianapolis Business Journal.
  27. ↑ Schouten, Cory (March 5, 2007). "Sun Capital draining Marsh excess". Indianapolis Business Journal.
  28. ↑ "Marsh Supermarkets Confirms Village Pantry Spinoff". Convenient Store News. December 1, 2015. Archived from the original on 2008-09-27.
  29. ↑ "LoBill Banner Transforms to Marsh Hometown Markets". Progressive Grocer. August 23, 2007.
  30. 1 2 Schouten, Cory (December 5, 2009). "Revived Marsh Supermarkets goes up for sale". Indianapolis Business Journal.
  31. ↑ Schouten, Cory (August 21, 2010). "Marsh taken off the market". Indianapolis Business Journal.
  32. ↑ "C&S Wholesale Grocers to Supply Marsh Supermarkets". PR Newswire (Press release). August 22, 2011.
  33. ↑ "Marsh CEO Lazaran leaving company; successor picked". Indianapolis Business Journal. April 13, 2011.
  34. ↑ Levingston, Chelsey (May 2, 2011). "Marsh Supermarkets chain has new CEO". JournalNews.
  35. ↑ Schouten, Cory (May 8, 2012). "Marsh CEO Kelley quits for job in New England". Indianapolis Business Journal.
  36. ↑ "Marsh Taps O'Boyle as Chairman, CEO". Supermarket News. November 15, 2012. (subscription required (help)).
  37. ↑ "O'Boyle Takes Reins at Marsh: Veteran of A&P and Jewel named CEO of Indiana-based supermarket chain". Progressive Grocer. November 14, 2012.
  38. ↑ "Marsh signs Supervalu as primary supplier, service provider". Indianapolis Business Journal. July 5, 2016.
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