Festival Foods to Be Acquired by St. Louis Grocery Chain

Festival Foods, a well-known grocery chain in Wisconsin, is being bought by Schnuck Markets of St. Louis. The deal covers 42 Festival Foods stores plus nine from Hometown Grocers. It will be run under a new parent, the 1939 Group, while keeping the Festival Foods brand, store names, and many of its current staff. We believe this change is more than just ownership. It could reshape how Festival Foods serves its communities. Customers care about things like price, service, local ties, and Festival has built its reputation on those values since 1946.

As we look deeper into this acquisition, we’ll see what it means for employees, shoppers, and the grocery market. Will the experience stay familiar? What might change? Let’s explore.

Background on Festival Foods

Festival Foods started in 1946 when Paul and Jane Skogen opened what was then Skogen’s IGA in Onalaska, Wisconsin. Over time, the company grew into 42 full-service supermarkets across Wisconsin. It also includes nine stores under Hometown Grocers with names like Dave’s County Market, Don’s Quality Market, Super Ron’s Food Center, etc. Festival Foods has built its brand on good customer service, community involvement, and treating workers well.

Overview of the St. Louis Grocery Chain

The buyer is Schnuck Markets, Inc., a family-owned grocery chain based in St. Louis, founded in 1939. Schnucks operates in Missouri, Illinois, and Indiana already. With this acquisition, Schnucks is growing larger and expanding its presence north into Wisconsin.

Details of the Acquisition Deal

• What’s being bought: Schnucks’ new holding company, the 1939 Group, Inc., is purchasing 100% of the shares of Skogen’s Festival Foods and Hometown Grocers, Inc. This includes shares held by CEO Mark Skogen and also shares from the employee stock ownership plan (ESOP).
• Number of stores: A total of 51 stores. 42 of them operate under the Festival Foods name. The other nine are under different Hometown Grocers banners.
• Branding and operations: The existing store names, branding, and headquarters will be kept. Festival Foods stores will continue operating as usual.
• Leadership & grouping: After the deal closes, Todd Schnuck (of Schnucks) will become Chairman & CEO of the 1939 Group, which will oversee Schnucks, Festival Foods, and Hometown Grocers as sister companies.
• When: The transaction is expected to finalize in October 2025, pending usual review and regulatory approvals.

Strategic Reasons Behind the Acquisition

We see several reasons why this move makes sense for both parties:

• Geographic expansion: Schnucks gets into Wisconsin, adding 51 stores, without having to build them from scratch. That’s a faster way to grow.
• Shared values and reputation: Both Festival Foods and Schnucks are family-oriented. They emphasize serving communities. That cultural alignment might make the integration smoother.
• Scale & operational advantages: More stores mean better buying power, shared supply chain efficiencies, and perhaps more cost control. We expect Schnucks to leverage its larger scale to support the smaller chains.
• Competitive pressures: Regional grocers face stiff competition from big national players and changing consumer habits (online ordering, delivery, demand for local/organic products). Being larger helps face those pressures.

Impact on Employees and Customers

• Employees: The announcement says that existing wages, benefits, and hours will stay the same. Most staff will be retained, and the ESOP participants are part of the deal.
• Customers: For shoppers, big things like store name, community support, and local events will continue. Prices, product selection, and the layout should stay familiar.
• Risks: Some worry about possible gradual changes, suppliers changing, store processes shifting, or less local decision-making. We’ll need to see how much change is behind the scenes.

Industry and Market Context

We from the grocery business side know consolidation is common lately. Chains are merging or buying others to survive rising costs, labor shortages, supply chain disruption, and inflation. Regional grocers are under pressure to modernize (tech, delivery, online shopping) or scale up. This acquisition fits that trend. Also, customers increasingly expect not just groceries, but value, convenience, and community engagement. If a chain can deliver all three, it has a better chance against big supermarkets or super-efficient online retailers.

Future Outlook

• Short-term changes: We expect that when this deal closes in October, things will feel pretty much the same in stores. Brand names will stay. Staff should be the same. But behind the scenes, operations may begin to align, like supply chain systems, procurement, and maybe shared logistics.
• Long-term vision: Over time, there may be more investment in technology, in-store experiences, or expanded services. Schnucks might bring its strengths in certain areas (e.g., digital, customer loyalty) to benefit Festival Foods.
• Growth potential: With the 1939 Group controlling more than 164 stores across four states after this deal, there is room for growth into neighboring regions. They could expand delivery, improve online shopping, and deepen community programs.

Conclusion

This deal is big. Festival Foods being acquired by Schnucks under the new 1939 Group marks a milestone in regional grocery competition. We expect most of what customers love about Festival Foods will stay intact: the name, the employees, and community programs. But over time, subtle changes are likely in how things are run. For Wisconsin residents, this could mean more stability and possibly improved services. And for the industry, it reminds us that family-owned regional chains are rethinking how to stay strong in a changing retail world.

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This content is for informational purposes only and is not financial advice. Always conduct your research.