The present and future of Randalls

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Re: The present and future of Randalls

Post by Greggo »

There’s no realistic buyer if Albertsons decides to unload the Austin-area Randalls stores. H-E-B has a 60% market share in Central Texas. It’s not like Houston where you have 3 grocers (Kroger, H-E-B and Walmart) essentially tied with about 25% of the market apiece and eager to grow.

Pretty much all the Austin Randalls stores are in close proximity to H-E-B and in some cases other grocers as well.

Lakeway: H-E-B across the street
Steiner Ranch: H-E-B about 1-2 miles away (Four Points)
Georgetown: H-E-B about 1-2 miles away (Georgetown/Williams Drive)
Round Rock: H-E-B about 1-2 miles away (Round Rock/Greenlawn Blvd.)
Cedar Park: H-E-B about 1-2 miles away (Lakeline); Sprouts across the street
Mesa Drive: H-E-B about 1-2 miles away (Far West Blvd.)
183/Braker: H-E-B across the street; Sprouts about 1-2 miles away
Mopac/William Cannon: H-E-B about 1-2 miles away (Brodie Lane/West William Cannon Drive); Whole Foods across the street
Brodie Lane/Slaughter Lane: H-E-B about 1-2 miles away (Menchaca Road/Slaughter Lane)
W. 35th Street: Central Market about 1-2 miles away
Exposition Blvd.: Huge new H-E-B being built (at the site of a former Randalls) 1-2 miles away
Balcones: H-E-B about 1-2 miles away (Far West Blvd.)
West Lake Hills: H-E-B about 1-2 miles away (Village at Westlake)
Ben White Blvd.: Central Market about 1-2 miles away

Several of these stores have recently been remodeled and now have the Colorful Lifestyle interior: Ben White, West Lake Hills, Mesa, Exposition, Brodie and Round Rock. It wouldn’t make sense to spend $$$ on stores you’re planning to dump.

Several other locations, including Brodie and Braker, just got new Drive Up & Go signage in the past few days.

The only locations, IMHO, that would be a step up for H-E-B (newer, larger stores) would be Brodie and Braker. The rest are either too small (former Safeway/AppleTree locations) or in inferior locations.
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Re: The present and future of Randalls

Post by storewanderer »

Greggo wrote: January 19th, 2020, 4:47 pm
Several of these stores have recently been remodeled and now have the Colorful Lifestyle interior: Ben White, West Lake Hills, Mesa, Exposition, Brodie and Round Rock. It wouldn’t make sense to spend $$$ on stores you’re planning to dump.

Several other locations, including Brodie and Braker, just got new Drive Up & Go signage in the past few days.

Given there are signs of remodeling and Drive Up & Go in closing stores in Houston, I am not sure if they are perhaps spending a little money as a last ditch effort to save things, or what. I also saw Drive Up & Go in a closing store in Eastern Division last year.

With that said, how do they do in Austin? I thought I had heard they did pretty well there?
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Re: The present and future of Randalls

Post by pseudo3d »

Greggo wrote: January 19th, 2020, 4:47 pm There’s no realistic buyer if Albertsons decides to unload the Austin-area Randalls stores. H-E-B has a 60% market share in Central Texas. It’s not like Houston where you have 3 grocers (Kroger, H-E-B and Walmart) essentially tied with about 25% of the market apiece and eager to grow.
As I pointed in my long post, Kroger and H-E-B in Houston have already penetrated the market with better and larger stores, and there's no reason to buy the remaining stores, except in maybe an even smaller handful of locations. In Houston, Walmart has always been slow in expanding the Neighborhood Market format, and even less so now due to the 2016 closures. There are only about a dozen NM stores in the entire Houston area (about 3k square miles).
The rest are either too small (former Safeway/AppleTree locations) or in inferior locations.
The smallest stores like 2727 Exposition (15k square feet) and 5311 Balcones (25k square feet following expansion) were originally Tom Thumb stores, if I recall. The situation Randalls created in Austin (small and outdated stores from their acquisitions of Tom Thumb and AppleTree) just made a collection of second-class stores while their stock in Houston at the time were some of the largest and nicest stores anyone in the market offered.

Put together, you've got about a portfolio of 30 stores remaining of a proud store that has gotten ground down over the years from neglect, but I still think that it could interest a party like Arlan's Market (which has stores in both markets and has a taste for acquisitions, though it has just 17 stores) or more likely, Brookshire Brothers (also prefers rural markets but is expanding, including opening a 40k square foot store in the H-E-B dominated Bryan-College Station market).
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Re: The present and future of Randalls

Post by architect »

pseudo3d wrote: January 19th, 2020, 9:00 pm
Greggo wrote: January 19th, 2020, 4:47 pm There’s no realistic buyer if Albertsons decides to unload the Austin-area Randalls stores. H-E-B has a 60% market share in Central Texas. It’s not like Houston where you have 3 grocers (Kroger, H-E-B and Walmart) essentially tied with about 25% of the market apiece and eager to grow.
As I pointed in my long post, Kroger and H-E-B in Houston have already penetrated the market with better and larger stores, and there's no reason to buy the remaining stores, except in maybe an even smaller handful of locations. In Houston, Walmart has always been slow in expanding the Neighborhood Market format, and even less so now due to the 2016 closures. There are only about a dozen NM stores in the entire Houston area (about 3k square miles).
The rest are either too small (former Safeway/AppleTree locations) or in inferior locations.
The smallest stores like 2727 Exposition (15k square feet) and 5311 Balcones (25k square feet following expansion) were originally Tom Thumb stores, if I recall. The situation Randalls created in Austin (small and outdated stores from their acquisitions of Tom Thumb and AppleTree) just made a collection of second-class stores while their stock in Houston at the time were some of the largest and nicest stores anyone in the market offered.

Put together, you've got about a portfolio of 30 stores remaining of a proud store that has gotten ground down over the years from neglect, but I still think that it could interest a party like Arlan's Market (which has stores in both markets and has a taste for acquisitions, though it has just 17 stores) or more likely, Brookshire Brothers (also prefers rural markets but is expanding, including opening a 40k square foot store in the H-E-B dominated Bryan-College Station market).
This is far fetched, but could Kroger potentially pick up the Austin-area stores? Even though the store base isn't huge, it would give them an entry into the market and wouldn't be difficult to service from a distribution standpoint considering their strong market share and distribution network in both Dallas and Houston. If Albertsons was to exit the Houston market, Kroger could also make a deal for the better performers such as Town & Country and Holcombe which are located away from their existing stores.

Also, in regards to the the Austin Randalls store base, the only former Tom Thumb remaining which was originally built as such is the West Lake Hills location. All other former Tom Thumb-built locations have closed over the years. The Exposition store is a bit of an anomaly, and I am unsure of what it originally opened as. The Ben White, Mesa Drive, West 35th and Balcones stores are all former Safeway/Appletree locations (the interiors are a dead giveaway), while the remainder of the store base was built either under Randalls, Safeway or Albertsons, and is much more relevant today.

Lastly, could the recent Randalls closures in the Woodlands/Kingwood be related to distribution? Now that trucks are primarily coming from either Austin via 290 or Fort Worth via 35/6/290, these northern stores are quite a bit of a detour. If their performance was marginal anyway, the increased distribution costs made have given Albertsons a reason to cut the cord.
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Re: The present and future of Randalls

Post by pseudo3d »

architect wrote: January 20th, 2020, 8:57 pm
pseudo3d wrote: January 19th, 2020, 9:00 pm
Greggo wrote: January 19th, 2020, 4:47 pm There’s no realistic buyer if Albertsons decides to unload the Austin-area Randalls stores. H-E-B has a 60% market share in Central Texas. It’s not like Houston where you have 3 grocers (Kroger, H-E-B and Walmart) essentially tied with about 25% of the market apiece and eager to grow.
As I pointed in my long post, Kroger and H-E-B in Houston have already penetrated the market with better and larger stores, and there's no reason to buy the remaining stores, except in maybe an even smaller handful of locations. In Houston, Walmart has always been slow in expanding the Neighborhood Market format, and even less so now due to the 2016 closures. There are only about a dozen NM stores in the entire Houston area (about 3k square miles).
The rest are either too small (former Safeway/AppleTree locations) or in inferior locations.
The smallest stores like 2727 Exposition (15k square feet) and 5311 Balcones (25k square feet following expansion) were originally Tom Thumb stores, if I recall. The situation Randalls created in Austin (small and outdated stores from their acquisitions of Tom Thumb and AppleTree) just made a collection of second-class stores while their stock in Houston at the time were some of the largest and nicest stores anyone in the market offered.

Put together, you've got about a portfolio of 30 stores remaining of a proud store that has gotten ground down over the years from neglect, but I still think that it could interest a party like Arlan's Market (which has stores in both markets and has a taste for acquisitions, though it has just 17 stores) or more likely, Brookshire Brothers (also prefers rural markets but is expanding, including opening a 40k square foot store in the H-E-B dominated Bryan-College Station market).
This is far fetched, but could Kroger potentially pick up the Austin-area stores? Even though the store base isn't huge, it would give them an entry into the market and wouldn't be difficult to service from a distribution standpoint considering their strong market share and distribution network in both Dallas and Houston. If Albertsons was to exit the Houston market, Kroger could also make a deal for the better performers such as Town & Country and Holcombe which are located away from their existing stores.

Also, in regards to the the Austin Randalls store base, the only former Tom Thumb remaining which was originally built as such is the West Lake Hills location. All other former Tom Thumb-built locations have closed over the years. The Exposition store is a bit of an anomaly, and I am unsure of what it originally opened as. The Ben White, Mesa Drive, West 35th and Balcones stores are all former Safeway/Appletree locations (the interiors are a dead giveaway), while the remainder of the store base was built either under Randalls, Safeway or Albertsons, and is much more relevant today.

Lastly, could the recent Randalls closures in the Woodlands/Kingwood be related to distribution? Now that trucks are primarily coming from either Austin via 290 or Fort Worth via 35/6/290, these northern stores are quite a bit of a detour. If their performance was marginal anyway, the increased distribution costs made have given Albertsons a reason to cut the cord.
Kroger hasn't expanded organically in years (save for acquisitions, namely Roundy's), and has done market pullouts, like closing all the non-HT Kroger stores in North Carolina (14), and is clearly not interested in smaller stores anymore. Based on what I've read of Kroger in the late 1980s and early 1990s, when the Houston market was getting battered from labor issues (almost killing the division entirely), competition from Randalls, and the lack of new stores (partly from issues from corporate), the AppleTree acquisitions were mostly to build out new stores and expand into new parts of town they weren't able to get into (like River Oaks), and most of these were closed or rebuilt within a decade. The main benefit to the Albertsons acquisition (2002) was the nicer stores, with many of them practically brand new (and even today, most of these stores still stand and do well).

The Randalls of today, even the nicer/better stores, doesn't provide any of that--its conceivable that better performing locations like Town & Country and Holcombe could provide Kroger another store or two, but the company's current trajectory isn't toward building market share, and in the last decade Kroger has been practically asleep at the switch in the Houston market (especially closer to the city center) as H-E-B has bored into it. They were matching H-E-B in the suburbs with new Marketplace stores but that slowed to a trickle...in the year 2019, H-E-B built seven new stores in the area (Whole Foods, Sprouts, and Costco built one store each, with six more Aldi stores). Kroger? Nothing. Kroger entering Austin isn't even Kroger's main M.O.: they'd never settle for being a distant second unless it came with a bigger package (like in the case with Mariano's in Chicago, but they got a good deal in Milwaukee).

I don't think distribution had to do with the store closures--it doesn't account for Galveston (and it looks like League City is another "open" one, looks like...did Galveston not count in terms of "remaining" stores?), which despite probably performing better than others, would have to really do well to fly on the "distribution" angle...and even in the summertime, it wasn't doing that well.

The third possible candidate to take on stores is probably Grocers Supply Co. (C&S) who could probably take them over and sell them to their partners as needed (inc. Arlan's, Food Town, Fiesta Mart, Sellers Bros., Rice Epicurean) but I have doubts that C&S wants to get into the store operation biz again, especially tasked with trying to sell all thirty, and none of the stores (except for Arlan's) have done any expanding recently.
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Re: The present and future of Randalls

Post by Greggo »

I went to the Grogan’s Mill (Buckthorne) location in The Woodlands tonight. It was sad, but not surprising, to see that it was busier now that the store closing sale has started than it was back when it was business as usual. Already a good chunk of the center store items are gone — probably about a third — despite mediocre discounts. Here are some pics that show the scene and also illustrate just how neglected this store is ... pre-Lifestyle decor and horribly patched flooring. Tomorrow, I’m planning to visit the closing Panther Creek store.
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Re: The present and future of Randalls

Post by storewanderer »

It looks like Safeway was really cheap with that Randalls and did a wall job but kept the old Albertsons flooring and tile in the departments.
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Re: The present and future of Randalls

Post by wnetmacman »

storewanderer wrote: January 25th, 2020, 12:08 am It looks like Safeway was really cheap with that Randalls and did a wall job but kept the old Albertsons flooring and tile in the departments.
Not only that, but that upper wood trim as well. I've seen that in multiple Albertsons stores.
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Re: The present and future of Randalls

Post by pseudo3d »

storewanderer wrote: January 25th, 2020, 12:08 am It looks like Safeway was really cheap with that Randalls and did a wall job but kept the old Albertsons flooring and tile in the departments.
Many of the Albertsons stores that were converted in Houston still have their original flooring...there's a Kroger in Northwest Houston that still has the unique flooring (Beverage Boulevard, etc.) and an H-E-B off Gessner that has the gray terrazzo-like tile from Albertsons.
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Re: The present and future of Randalls

Post by architect »

wnetmacman wrote: January 25th, 2020, 3:15 am
storewanderer wrote: January 25th, 2020, 12:08 am It looks like Safeway was really cheap with that Randalls and did a wall job but kept the old Albertsons flooring and tile in the departments.
Not only that, but that upper wood trim as well. I've seen that in multiple Albertsons stores.
Not only that, but that store looks unchanged from when I last visited at least 6-8 years ago (and it was already deteriorating noticeably back then). With both Kroger and H-E-B having modern stores nearby (and even the Panther Creek Randalls arguably being more competitive), why anyone would shop here is beyond me.
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