Hiller: Selling stores to Kroger was financial decision

The Kroger Company of Michigan announced Friday it will buy all seven area Hiller's Markets, bringing an end the 75-year legacy of a high-end grocery store company that was loved by its customers and respected by competitors.

Kroger, the nation's largest grocery store chain, will turn all but one of Hiller Markets' seven stores into Kroger locations shortly after the sale closes in July.

Ken McClure, consumer communication manager for Kroger of Michigan, said the purchase is part of Kroger's plan to invest $150 million to expand, renovate and open new stores in Michigan this year.

That investment is on top of $100 million the company spent to expand and improve its Michigan operations last year. McClure declined to disclose the purchase price for Hiller's Markets.

"I can tell you metro Detroit is a very important market for us," McClure said. "Jim Hiller has been very supportive of the agreement ... We are very proud to be able to carry the Hiller's legacy forward."

Kroger, in recent years, has been expanding its selection of specialty food -- especially in its Marketplace stores -- throughout its Michigan locations. Some Hiller's Markets stores aren't large enough to accommodate the Marketplace format, McClure said.

Still, he said, "We are hoping to take our Kroger format and enhance it with Hiller's great legacy of fresh, local an ethnic foods."

Even as Kroger prepares to take over the specialty chain, analysts say the move could open opportunity for other local grocery store operators.

"It's going to increase the specialty grocer's view of what there is to grab for market share for specialty grocery customers in Southeast Michigan," said Daniel Stern, principal of Lormax Stern, a Bloomfield Hills-based real estate development company. "And for Kroger, it's going to increase their market share as well."

Stern said the deal could open up opportunities for local high-end grocers such as Papa Joe's, Westborn and national grocery store operators such as Whole Foods and Phoenix-based Fresh Thyme, which is opening at least four stores in Southeast Michigan.

Kroger will convert Hiller's Markets stores located in West Bloomfield, Ann Arbor, Northville, Plymouth, South Lyon and Commerce Township to Kroger stores.

It will assume the lease, but not convert, Hiller's Commerce Township store at 3010 Union Lake Road. McClure said Kroger will work with the landlord to find another retailer to fill that space. That location was a former Farmer Jack store that Hiller's purchased in the 1990s.

Current Hiller's associates will be encouraged to apply for jobs with the Kroger.

Some Hiller's customers were not raising a glass of Made in Michigan wine to the news.

Devotees of the small regional Hiller's chain say they'll miss the unusual specialty products and hope locally sourced products will still be available.

"I like the personal service, nice people, good workers, fresh meat and fish and Michigan-made (items)," said Sal Katty, a 61-year-old business owner from West Bloomfield, who said he'd been shopping at Hiller's for two decades, since it was in Oak Park.

Other shoppers in the parking lot of the bustling West Bloomfield store agreed.

"They have excellent customer relations," said Shari Smith of West Bloomfield. "They never run out of things around the holidays."

Marilyn Lantor of West Bloomfield said she likes Hiller's workers' quick reactions to requests for stocking new products.

But Jim O'Malley, 52, prefers Kroger to Hiller's. The only reason he'd stopped in for a quick purchase (bread, chicken, produce) Friday afternoon was he'd met a friend for lunch at Orchard Mall.

"I like Kroger better. I like the prices better," the West Bloomfield electrician said.

Hiller's Markets was started 75 years ago by Sid Hiller. Jim Hiller is the current president and his son, Justin, is vice president of the family-owned grocery store chain.

Justin Hiller, would not comment on how the sale came about, saying only that it was a financial decision.

"It's a sad day for me but at the same time offers an opportunity to care for the employees and that was important to me," said Hiller, who also said he will not be staying on in any role.

Hiller also noted that Kroger has a union (not all of Hiller's employees are members) and Kroger has a contractual obligation for the union to continue.

Brian Collins, a 27-year employee and currently a meat cutter at the Hiller's Markets Northville store, said employees heard rumors months ago but were told nothing.

Collins said like many Hiller's Markets employees, they found out when Kroger made the announcement this morning.

"So far, nobody has told me about anything," said Collins. "What about our vacation time? Our personal time? We signed a new contract in September and took $1-per-hour pay cut across the board."

The newest Hiller's Markets store opened in October 2013 in South Lyon. That store features a craft beer and wine bar and a demonstration kitchen.

In October, Hiller's Markets launched a discount fuel rewards program redeemable at Speedway stations.

Mary Spencer, 56, culinary instructor at Taste: A Cook's Place in downtown Northville, said she was a little shocked to hear the news of Hiller's Markets selling to Kroger. As a longtime Hiller's Markets shopper, she said she views their stores as more of an "old-time kind of place where I can order something special if need be."

"You can get meat and fish at other stores but not like Hiller's," she said. "They carried a lot of Michigan products, too and other specialties like a section on British foods," Spencer said. "I respected Jim Hiller for that. He really tried to really cater to his customers and their needs. "

Contact Susan Selasky: 313-222-6432 or sselasky@freepress.com. Follow her on Twitter @SusanMariecooks.

Hiller's Markets operates stores in the following locations

3615 Washtenaw Avenue, Ann Arbor

39950 W 14 Mile Road, Commerce Township

425 N. Center Street, Northville

15455 Haggerty Road, Plymouth

*3010 Union Lake Road, Commerce Township

51847 Ten Mile Road, South Lyon

6433 Orchard Lake Road, West Bloomfield

*Note: This location will not become a Kroger.