Albertsons to re-enter Oklahoma

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Albertsons to re-enter Oklahoma

Post by storewanderer »

http://durantdemocrat.com/news/local-ne ... ns-grocery

I assume this would be part of the Dallas Division. This is a pretty small town. I am curious if this is for real.
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Re: Albertsons to re-enter Oklahoma

Post by pseudo3d »

It is very close to the existing base, and to put things into context, it was also LLC that had decided to build a new store from the ground up in Alamogordo.
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Re: Albertsons to re-enter Oklahoma

Post by romleys »

Personally I think it would be a BIG mistake for Albertsons to return to Oklahoma. They closed their stores in the Tulsa area in 2007 and some of the buildings are still sitting vacant ten years later. I believe the Albertsons name is generally not well received as the company made moves similar to when they were in NorCal by abruptly shuttering numerous locations leaving hundreds without jobs.
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Re: Albertsons to re-enter Oklahoma

Post by pseudo3d »

romleys wrote:Personally I think it would be a BIG mistake for Albertsons to return to Oklahoma. They closed their stores in the Tulsa area in 2007 and some of the buildings are still sitting vacant ten years later. I believe the Albertsons name is generally not well received as the company made moves similar to when they were in NorCal by abruptly shuttering numerous locations leaving hundreds without jobs.
The 2007 closures were part of the LLC scale-back, and keep in mind that the 11 stores that Albertsons closed there only two were closed permanently, 12912 East 86th Street, and 1601 N. Peoria Avenue. The former is now a Walmart Neighborhood Market and the latter a local store called Gateway Market, which opened in 2010 but struggled to use the vast space of the store and now is currently open in a configuration that uses a fraction of the former space. (link)

Most of the former Albertsons were bought by independent grocers (which may have closed by this time), and it was clear that the Oklahoma market really had not been going anywhere. To elaborate, there were 26 stores in Oklahoma, three of which were closed in 2007 (link). The same 26 stores had all been operating since 2002, and were once part of the Great Plains Division (which operated into Nebraska), and only two had closed since the sale of the Tulsa Division Center that year, when it was sold to Fleming. (link) Fleming as you call recall was imploding about that time, which no doubt screwed things up for the Oklahoma stores.

Either way, Albertsons scouting for sites in Oklahoma says a lot about their position in Texas. With the closing of the Houston DC and the folding of that division into the Dallas division, it would make sense on one level to start in-filling stores, but either through handshake agreements or just the reality of the situation, H-E-B dominates. Waco has five (used to be six) H-E-B stores with only an Aldi, Walmart, and both Brookshire Bros. and Brookshire's on the far periphery, and like I mentioned before, Albertsons never did well there (a former Skaggs that held on until 2006, and a short-lived early 1990s store that was gone within three years). In Bryan-College Station, once an extremely diverse grocery market where Randalls, H-E-B Pantry, Albertsons, Kroger, AppleTree, and Winn-Dixie all co-existed, is now an H-E-B town, with four stores (a fifth coming as early as next year) and down to two Kroger stores.

I wouldn't write off Albertsons in Oklahoma yet, could be worth a shot. The site they're discussing doesn't seem very large.
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Re: Albertsons to re-enter Oklahoma

Post by storewanderer »

Since they seem to want to buy out everything, they could try to buy something in Oklahoma. If they bought Homeland they would get back some of their old stores, along with a lot of old Safeways, along with a host of very small town stores under the United-OK banner.

I think Albertsons did okay in Oklahoma and I am not really clear why they exited that market in the first place. What they did was leave a market that was already lacking in grocery choices, rather high and dry of decent stores. A good chunk of the stores in Oklahoma City were built by Albertsons in the 90's, while the Tulsa Stores were primarily old Skaggs/Alpha Beta locations in pretty poor shape. The rural stores like Ponca City (old Skaggs remodeled but in need of work), Bartlesville (may have been an old Skaggs but was big and well remodeled),

Homeland is a very vulnerable operator that has been struggling for years, but they have slowly been doing remodels since being split off from AWG and the remodeled stores are fantastic. Since Albertsons left Oklahoma, Reasors on the Tulsa side has grown and is the closest thing to a "quality" operator in that market. Crest in OKC has also grown but is more of a discounter. Sprouts, Whole Foods, and Natural Grocers have also opened multiple stores in Oklahoma. The Fresh Market is also still open in Tulsa. This is a market that has been void of quality grocery options since Albertsons left but smaller operators have stepped up and filled the plate.

WinCo is entering Oklahoma and if Albertsons is smart they will stay away. Albertsons should know better with what WinCo has done to them in a lot of other places, but maybe they don't. WinCo will do very well in Oklahoma.
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Re: Albertsons to re-enter Oklahoma

Post by architect »

pseudo3d wrote:Either way, Albertsons scouting for sites in Oklahoma says a lot about their position in Texas. With the closing of the Houston DC and the folding of that division into the Dallas division, it would make sense on one level to start in-filling stores, but either through handshake agreements or just the reality of the situation, H-E-B dominates. Waco has five (used to be six) H-E-B stores with only an Aldi, Walmart, and both Brookshire Bros. and Brookshire's on the far periphery, and like I mentioned before, Albertsons never did well there (a former Skaggs that held on until 2006, and a short-lived early 1990s store that was gone within three years). In Bryan-College Station, once an extremely diverse grocery market where Randalls, H-E-B Pantry, Albertsons, Kroger, AppleTree, and Winn-Dixie all co-existed, is now an H-E-B town, with four stores (a fifth coming as early as next year) and down to two Kroger stores.

I wouldn't write off Albertsons in Oklahoma yet, could be worth a shot. The site they're discussing doesn't seem very large.
Personally, I wouldn't read into this move too much. Durant is generally considered part of the Sherman-Denison market, and from what I can gather, it sounds like the city is primary trying to lure Albertsons in in order to gain access to a decent-quality grocer and to keep tax revenue from leaving town. However, if Albertsons decides to make a move further into the state (either through new construction or acquisition), things could get interesting. Like pseudo3d said, Albertsons could be pushing into Oklahoma to keep market share steady in the region while offsetting their market share losses in Houston and potentially DFW if HEB ever enters the market. Albertsons doesn't want to be in Safeway's position from prior to the 2015 buyout where their Texas store count and market share was so low that the division wasn't profitable, while some stores were still highly successful.
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Re: Albertsons to re-enter Oklahoma

Post by pseudo3d »

storewanderer wrote:Since they seem to want to buy out everything, they could try to buy something in Oklahoma. If they bought Homeland they would get back some of their old stores, along with a lot of old Safeways, along with a host of very small town stores under the United-OK banner.

I think Albertsons did okay in Oklahoma and I am not really clear why they exited that market in the first place. What they did was leave a market that was already lacking in grocery choices, rather high and dry of decent stores. A good chunk of the stores in Oklahoma City were built by Albertsons in the 90's, while the Tulsa Stores were primarily old Skaggs/Alpha Beta locations in pretty poor shape. The rural stores like Ponca City (old Skaggs remodeled but in need of work), Bartlesville (may have been an old Skaggs but was big and well remodeled),

Homeland is a very vulnerable operator that has been struggling for years, but they have slowly been doing remodels since being split off from AWG and the remodeled stores are fantastic. Since Albertsons left Oklahoma, Reasors on the Tulsa side has grown and is the closest thing to a "quality" operator in that market. Crest in OKC has also grown but is more of a discounter. Sprouts, Whole Foods, and Natural Grocers have also opened multiple stores in Oklahoma. The Fresh Market is also still open in Tulsa. This is a market that has been void of quality grocery options since Albertsons left but smaller operators have stepped up and filled the plate.

WinCo is entering Oklahoma and if Albertsons is smart they will stay away. Albertsons should know better with what WinCo has done to them in a lot of other places, but maybe they don't. WinCo will do very well in Oklahoma.
architect wrote: Personally, I wouldn't read into this move too much. Durant is generally considered part of the Sherman-Denison market, and from what I can gather, it sounds like the city is primary trying to lure Albertsons in in order to gain access to a decent-quality grocer and to keep tax revenue from leaving town. However, if Albertsons decides to make a move further into the state (either through new construction or acquisition), things could get interesting. Like pseudo3d said, Albertsons could be pushing into Oklahoma to keep market share steady in the region while offsetting their market share losses in Houston and potentially DFW if HEB ever enters the market. Albertsons doesn't want to be in Safeway's position from prior to the 2015 buyout where their Texas store count and market share was so low that the division wasn't profitable, while some stores were still highly successful.
Durant, OK is very close to Sherman-Denison, which is itself an offshoot of Dallas-Fort Worth's stable market. It isn't a mind-blowing new market entry by any means and is only roughly equal to some of the smaller acquisitions last year (Lawrence Bros, Paul's) though this is a new store and not a purchase. Chances are it's going to be a sub-40k square foot store, and that's perfectly fine, building 60k+ square foot palaces in areas too small and too poor to support one are one of the things that screwed over Albertsons in the past. Until we hear more about potential Oklahoma plans, I don't think we should start considering if they'll fail in Oklahoma or not, but since they've opened the door and this is the first new state they've built new in...probably since the 1990s to be honest, maybe they might consider Homeland, though that's a tough sell, because Homeland is employee-owned, and not a single owner or boardroom looking to cash out. I can't speak for Homeland's store base but I imagine that the "old Safeways" mentioned are either profitable and/or substantially remodeled. Since Homeland was established as a management-led buyout of Safeway's OKC division and failed like its siblings did (Food Barn, AppleTree), I imagine that the crummy ones were disposed of some time ago (very few former AppleTree stores today operate as first-class grocers, if grocers at all). The Albertsons stores were sold in 2007 due to the attitude of LLC that if it wasn't super profitable, they can make more money off of selling them (there's more where that came from). The interesting thing to me is not necessarily Oklahoma (though it would finally put Albertsons' HBA distribution center in the same state as one of its stores) but rather the Dallas-Fort Worth market spreading its roots, given a lot of new store information out of that division was inner city based (which makes sense, seeing how Tom Thumb still maintains a rather healthy presence in the more exclusive parts of Dallas).
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Re: Albertsons to re-enter Oklahoma

Post by storewanderer »

But the article says Albertsons is making deals with multiple Oklahoma cities to enter and get incentives? It sounds like a major expansion?
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Re: Albertsons to re-enter Oklahoma

Post by pseudo3d »

storewanderer wrote:But the article says Albertsons is making deals with multiple Oklahoma cities to enter and get incentives? It sounds like a major expansion?
It wasn't clear that the multiple cities are cities ABS is necessarily looking at, just that those cities have incentives available. All it really states is that Albertsons-based developers were looking at multiple Oklahoma sites for growth opportunities. They're not buying up chains that they have no market in (not yet, at least) and certainly not the pre-2001 level building in different cities. For all we know, they could be scouting some smaller Texas cities as well, but as I said, they're not underserved due to H-E-B and/or Brookshire, like Oklahoma is.

Until they release some hard plans to build in Durant and not just "developer wants X at Y", or we hear of some other rumors with some stuff in it, there's no reason to believe a major expansion into Oklahoma is underway, at least not anywhere near the same thing Old Albertsons thought about "major expansion".
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