For the second time in two years, a grocery store in Tomah is changing hands.
Festival Foods announced Thursday it is purchasing Gordy’s Market in Tomah, along with two locations in Eau Claire. Gordy’s purchased the store from the Burnstad’s family in 2015.
The acquisition is expected to close in September. After the acquisition, all three locations will operate under the Festival Foods banner.
Greater Tomah Area of Commerce executive director Tina Thompson said Friday she’s optimistic about the new owners.
“Festival is known for being a great community partner, and we’re excited for the opportunity that brings to Tomah,” she said.
The sale ends several weeks of speculation over the fate of the Gordy’s Tomah location as customers noticed an increasing number of empty shelves, especially in the liquor department. Last month, Burnstad’s closed its restaurant in the building citing inability to reach a lease agreement
In March, a Minnesota company, EGP, filed a lawsuit in Chippewa County Court seeking $38,665 from Gordy’s Market. David Schafer of Gordy’s said at the time his firm had switched vendors and paid EGP. The lawsuit was dropped.
Tomah city administrator Roger Gorius said it’s important for a grocery store to remain at the location where the Burnstad’s first opened in 1944.
“That’s a grocery store that has been a staple in Tomah forever,” Gorius said. “We wouldn’t want an empty building there when we’re trying to develop our south side.”
Gorius said the building is within Tomah’s downtown Tax Incremental Finance District.
Festival Foods resident and CEO Mark Skogen said expanding into Tomah and increasing the company’s presence in Eau Claire are key opportunities for the company to better serve the company’s growing customer base throughout Wisconsin. Festival Foods operates 28 other locations throughout the state, including an Eau Claire store that opened in 2005. Festival Foods purchased stores in West Baraboo and Portage from Pierce’s Market in May.
“We look forward to becoming part of the Tomah business community and welcoming new guests there. We’re also excited to open two new stores in Eau Claire, which will give our guests in that town more options,” Skogen said.
The announcement comes the same week Gordy’s announced it will close a store in Hayward, ending an era of expansion for the Chippewa Falls-based grocery chain.
Over the past two years, Gordy’s has grown dramatically, having over 20 stores stretching from Hayward to Richland Center. That expansion includes taking over the Hamilton Avenue location that was a Copps store, and buying the N. Clairemont store from Mega Foods.
But the Hayward store’s closing signaled a new era for Gordy’s, a drawing back from expanding. Some action was widely anticipated.
“The Gordy’s organization is currently in the midst of a restructuring of their business. This includes the divestiture of their business. This includes the divestiture of the Hayward location to reach a level of deeper performance and customer engagement with the remaining stores,” Gordy’s said in a press release this week.
Jeff Schafer, the company’s CEO, said: “It’s time to get back to our roots and operate a smaller organization with the highest level of service to our communities.”
The Festival news release Thursday also did not mention the fate of Gordy’s two locations in Chippewa Falls and one store in Lake Wissota.
The La Crosse Tribune and Chippewa Falls Herald contributed to this report.