Smith’s Food and Drug, simply known as Smith’s, is a supermarket chain that was founded in 1911 in Brigham City, Utah by Lorenzo Smith. A subsidiary of Kroger, it is a prominent regional supermarket chain operating in Utah, Nevada, New Mexico, Arizona, Montana, Idaho, and Wyoming. Smith’s headquarters is in Salt Lake City.
Smith’s Food & Drug began in 1911 when Lorenzo 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 Market 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. After his death, his eldest son Fred Smith, ran the chain until later, when his brother Jeff Smith became the 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 1996, Smith’s acquired the Arizona supermarket chain Smitty’s Supermarkets.
In 1997, Smith’s Food & Drug was acquired by Portland-based Fred Meyer for about $700 million (equivalent to $1.13 billion in 2020) in stock. The deal 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 $2.1 billion in 2020) in Smith’s debt, which was accumulated largely from a recapitalization that was led by the Yucaipa Companies of Los Angeles.
In 1998, Fred Meyer was acquired by Kroger in a deal that would create a supermarket giant with $43 billion (equivalent to $66.8 billion in 2020) in annual revenue and 2,200 stores in 31 states. As a result of the Kroger-Fred Meyer merger, Smith’s had immediately become a subsidiary of Kroger and most Smith’s Food & Drug Centers in Arizona were rebranded as Fry’s Food and Drug. Kroger paid about $8 billion (equivalent to $12.43 billion in 2020) in stock for Fred Meyer and assumed $4.8 billion (equivalent to $7.46 billion in 2020) of the company’s debt, further consolidating the grocery business and creating the largest supermarket chain in the country. With the transaction, Kroger regained the spot it lost to Albertsons 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. Many of the products sold at Smith’s are Kroger-branded.