architect wrote:For clarification, the FTC made Albertsons divest this store; if they did not divest this location, they likely would have been required to divest multiple other surrounding stores to make up for the market share impact. Sprouts would be an interesting tenant in this space; it is definitely right-sized for their format (considering that it is small for a traditional grocer these days) and the demographics would likely work well too. The fact that it would give them a store directly on the 121 corridor would be huge plus.SoleOwnerOfMyName wrote:But would Tom Thumb want it given that they have already walked away from the store in the past? I am guessing there was a reason they were willing to give this one up.
Of course, they did reopen the Tom Thumb a few miles north that also became a Sun Fresh and which was later acquired by H-E-B and then back full circle to Tom Thumb - so maybe they will do the same here.
Honestly, I have a hard time seeing how any of the Tom Thumb stores stay in business except for the ones that happen to be the only store in their area. The stores are not particularly special and the prices are breathtakingly high. Central Market is considered an upscale, high end grocer - yet their prices are consistently lower than Tom Thumb on comparable items. And Albertsons is even worse - their stores tend to be a bit worn out looking and their prices are every bit as high as Tom Thumb. Presumably enough people do shop there as they manage to keep their doors open - though on the infrequent occasions I stop in one because I have a last minute need for something and that is all that is close to wherever I am I rarely see more than a handful of other customers.. Given all the proliferating alternatives, I don't see how they can keep going in the long run unless something changes. And if H-E-B ever enters the market - they are doomed.
I wonder if that location would be a possible fit for Sprouts? The nearest one is about 5 to 7 miles and a good number of stop lights away near Colleyville. I am guessing that the radius a Sprouts draws from is wider than a conventional supermarket - so maybe they would regard that as too close. I also noticed that a large former Tom Thumb in southwest Fort Worth has been converted into a giant Specs liquor store. Not sure if liquor sales are legal in Bedford or not - but, if so, perhaps that would be something that could go in.
And I definitely agree with your analysis of Tom Thumb/Albertsons; it amazes me that they have been able to largely maintain their overall market share. A combination of high prices, understaffed sales floors and drab/outdated stores is almost always a recipe for disaster. I think the one thing that has kept them afloat is the fact that many established neighborhoods in North Dallas and wealthy northern suburbs such as Richardson and Plano have little traditional grocer competition, or at the most Kroger locations which are somewhat underwhelming. Meanwhile, in Houston, HEB is taking out Randalls' remaining stronghold neighborhoods by their willingness to navigate complex land acquisition and develop urban formats which work well in established neighborhoods. If HEB enters DFW, the Albertsons death knoll will definitely begin without some major turnaround work.
Splitting off from the Fiesta/Bedford topic, I'm sure I've said all of this at one time or another, but...I just can't imagine H-E-B dominance in Dallas-Fort Worth, at least any time soon, and I don't believe the "Albertsons is doomed" narrative either. The answer is more than just difficulty securing land. I do understand that H-E-B has a big cult following, enough that people will write articles on how great it is.
Sounds great, doesn't it? Well, forget it because most of those are only in the largest, most upscale locations, so unless you live in or at least near a very affluent part of town, that won't be your H-E-B store. You won't be able to weigh and package your own produce. No Cafe on the Run. No coffee shop (they may have some coffee at the deli, if you're lucky). No make-your-own pizza. No giant blocks of cheese. Well, at least you have your overpriced Whataburger ketchup and novelty tortilla chips. That is what life is like for most of us with H-E-B stores.
H-E-B does have solid pricing (on most items) and no card, as well as a well-thought out store brand, but that's about it. The stores inside and out have the worst aesthetics of any major supermarket, and before you start posting some fancy exteriors of new H-E-B stores in San Antonio, Houston, and Austin, those are the rare exceptions, and again, most of their stores run from Kroger-tier to Fiesta-tier (except without the interesting items Fiesta carries). The other advantage H-E-B has over Albertsons/Tom Thumb (and to a lesser extent, Kroger) is bigger stores (basically 65k square feet and up) whereas 65k square feet tends to be the cap for those stores. But it would be difficult trying to find locations, let alone trying to build mega stores in established areas.
So in the end, H-E-B just becomes another grocery store, and it becomes an uphill and expensive battle to make their market share worthwhile. Even if Albertsons/Tom Thumb did essentially nothing, they would still face Kroger, which has been long established in Dallas just as it had in Houston.
You could bring up Houston, but Houston was a very different scenario. Let's recap. H-E-B Pantry was a low-cost format to compete against Food Lion, which was already in Dallas (21 stores as of 1991, their entry in Dallas). The big three in Houston at the time was Kroger, Randalls, and AppleTree (formerly the Houston Division of Safeway). H-E-B Pantry beat Food Lion to the market and it wasn't long before that ABC report came out regarding Food Lion so Houston ended up having no more than 7 or 8 Food Lion stores and H-E-B Pantry was able to plant dozens of stores as the market continued to change...AppleTree died, and Albertsons entered the market, the last section of Texas that Albertsons did not have a presence in.
Albertsons attempted to build a number of new stores in the late 1990s, and while a number of stores did well, there were a number that didn't, and the massive company-wide expansion underway at Albertsons would stretch resources thin. All during this time, Randalls was purchased by Safeway, which made a number of disastrous changes that began to drive off shoppers. Finally, H-E-B Pantry had reached critical mass and they were able to build a full-line store in 2001. The collapse of Albertsons gave them stores and store sites (they purchased at least four operating stores and one store site), and the downfall of Randalls gave them an excellent opportunity to seek out disgruntled shoppers. In a nutshell, that's how they became strong in Houston. It should be obvious that the way they did it won't be able to replicated in Dallas.
Plus, H-E-B can't really make a deluxe format in Dallas without risking a dilution of the Central Market stores of various sizes in D-FW (including, remarkably, a former Marina Safeway), and harming those stores would make the entire Dallas-Fort Worth area unusable (note that D-FW has several Central Market stores--despite dominating the market, San Antonio and Houston have just one).
Aside from Kroger and Albertsons/Tom Thumb, WinCo Foods has entered Dallas with a distribution center in Denton, which will not only further subdivide market share but also snipe lower-income areas, further limiting H-E-B's impact in the area. So their only real options at this point to effectively get market share is to buy out weaker competitors or brute-force their way into the market at a high cost with diminishing returns.
I don't know the real reason why there aren't H-E-B stores in Dallas (allegedly, there's a no-compete clause in place but those are just rumors), but the threat of H-E-B stores, even if they aren't going to bring doom to Albertsons if they do come, should keep Albertsons/Tom Thumb on its toes (and that's a good thing).