Raleys to buy 6 of 8 remaining Scolaris Stores

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storewanderer
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Raleys to buy 6 of 8 remaining Scolaris Stores

Post by storewanderer » March 21st, 2018, 4:11 pm

Looks like Raleys has bought 6 of the 8 remaining Scolaris stores.

This is a reasonably good fit and was probably a good outcome.

A little curious how Raleys will do with rural locations after they pulled out of Fallon and Winnemucca but I guess we will see how it goes.

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Re: Raleys to buy 6 of 8 remaining Scolaris Stores

Post by lola42 » March 21st, 2018, 6:48 pm

"Raley’s will transition five Scolari’s locations to the Raley’s banner, and the Sak ‘N Save will keep its name and operate as part of the Food Source division of Raley’s. The transition is expected to be completed by late spring, 2018...The Scolari’s family will continue to operate and serve its customers in Sparks and Sun Valley...

List of store locations to be transferred to Raley’s:
Scolari’s Food & Drug: 3310 South McCarran Boulevard, Reno, NV
Scolari’s Food & Drug: 4788 Caughlin Parkway, Reno, NV
Scolari’s Food & Drug: 1400 US Highway 95A North, Fernley, NV
Scolari’s Food & Drug: 176 West Goldfield Avenue, Yerington, NV
Scolari’s Food & Drug: Hwy 95 – Air Force Road, Tonopah, NV
Sak ‘N Save: 1901 Silverada Boulevard, Reno, NV

In the 1990s, Raley’s purchased two other family-owned grocery brands, Nob Hill Foods in the Bay Area and Bel Air Markets in the Sacramento region. The company currently operates 122 stores under four banners. The additional stores will increase the total store count to 128."

https://www.businesswire.com/news/home/ ... -Scolari’s

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Re: Raleys to buy 6 of 8 remaining Scolaris Stores

Post by storewanderer » March 21st, 2018, 7:58 pm

I am pretty happy with this outcome. It has been known for a whole Scolaris would go away, it was just a question of when and how. I was concerned there may be another outcome/other buyer (larger chain) that would have been an absolute disaster for the stores, but I am pleasantly surprised to see a quality operator like Raleys buy the stores. I think Smiths would have been a better fit but Kroger continues to be drifting into some other direction.

I am not sure what to think of those two stores Scolaris is retaining. Those two stores are untouched my entire lifetime (30+ years); no bakery/deli. Sparks has a pharmacy. These two probably do okay for what they are. Sun Valley probably could do better if expanded/remodeled but I'm not really sure what the right format would be there.

I do not know how Raleys is going to do with stores in lower middle income locations (they already have stores of their own like that in Nevada that are struggling such as Sparks and Reno North Hills) like most of these, but we will see how it goes. The store at Caughlin Parkway was the jewel of this group in a high income area with limited competition. I think it will do better as Raleys. I also think the store in Reno at Mira Loma will do much better as Raleys if they remodel it and operate it differently (start by stopping smoking in the detached but connected through entry foyer slot machine area so you aren't hit with a stale smoke smell when you walk in) because it is a pretty downscale operation as Scolaris despite being around a lot of houses, some of which are actually upper middle class.

That Sak N Save is also a pretty decent volume operation but it is a pretty rough place. Food Source will be a definite downgrade for the Sak N Save which has a wonderful produce department and I am really going to be curious to see what they do with all of the space (the store is about 90,000 square feet).

Tonopah is interesting, it has no competition, but is quite old and unupdated; it has a pharmacy but no bakery or deli. I don't see any competition entering that market. Yerington is a newer store with a similar situation, I see limited risk of competition.

Fernley has recovered pretty well from a Wal Mart opening across the road a decade ago... but Raleys history in these small towns against Wal Mart is not good based on Fallon and Winnemucca. Lucky for them, Fernley continues to grow.

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Re: Raleys to buy 6 of 8 remaining Scolaris Stores

Post by pseudo3d » March 22nd, 2018, 7:10 pm

storewanderer wrote:
March 21st, 2018, 7:58 pm
I am pretty happy with this outcome. It has been known for a whole Scolaris would go away, it was just a question of when and how. I was concerned there may be another outcome/other buyer (larger chain) that would have been an absolute disaster for the stores, but I am pleasantly surprised to see a quality operator like Raleys buy the stores. I think Smiths would have been a better fit but Kroger continues to be drifting into some other direction.
Sounds like you were concerned about one "larger chain" in particular. Since it's fairly obvious which one you were referring to, why wouldn't they be a good fit? Is it just the prices?

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Re: Raleys to buy 6 of 8 remaining Scolaris Stores

Post by storewanderer » March 22nd, 2018, 10:17 pm

A combination of pricing and operational issues. Plus the tendancy to want "one size fits all" stores when these particular stores are anything but that. I'm glad to see Raleys is the buyer.

However, I do think there are other underperforming stores in the Reno/Sparks/Carson City market, that would be a much better fit for said larger chain in question.

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Re: Raleys to buy 6 of 8 remaining Scolaris Stores

Post by storewanderer » March 30th, 2018, 11:16 pm

Was in one of these Scolaris-owned stores last night and couldn't help but notice how upset the employees seemed. I have dealt with these people for years and they in the past are always in good spirits. It seems they were advised that they were going to lose their current seniority and vacation and have to re-apply for their positions with Raleys and "start over."

I know how hard it is for grocery stores (and any service business) to find employees in the current environment so I am not terribly concerned about Raleys trying to offload these employees because I think they need experienced people to run their stores. But the perception of these employees, based on what they have been told, is less than positive.

Hopefully Raleys gets into these stores and interviews employees and makes offers quickly to get things back to normal. Especially in the rural towns, this sort of uncertainty does not benefit anyone and would not really pass the four way test.

They should just keep the existing employees in the stores (actually to run these stores as Raleys, they will need to increase employee counts... Scolaris ran pretty lean), but bring in some of their own managers, and then transfer some of these Scolaris managers into the existing stores.

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Re: Raleys to buy 6 of 8 remaining Scolaris Stores

Post by pseudo3d » April 1st, 2018, 10:02 am

storewanderer wrote:
March 30th, 2018, 11:16 pm
Was in one of these Scolaris-owned stores last night and couldn't help but notice how upset the employees seemed. I have dealt with these people for years and they in the past are always in good spirits. It seems they were advised that they were going to lose their current seniority and vacation and have to re-apply for their positions with Raleys and "start over."

I know how hard it is for grocery stores (and any service business) to find employees in the current environment so I am not terribly concerned about Raleys trying to offload these employees because I think they need experienced people to run their stores. But the perception of these employees, based on what they have been told, is less than positive.

Hopefully Raleys gets into these stores and interviews employees and makes offers quickly to get things back to normal. Especially in the rural towns, this sort of uncertainty does not benefit anyone and would not really pass the four way test.

They should just keep the existing employees in the stores (actually to run these stores as Raleys, they will need to increase employee counts... Scolaris ran pretty lean), but bring in some of their own managers, and then transfer some of these Scolaris managers into the existing stores.
I don't know why acquiring companies (Albertsons, Publix, Kroger, H-E-B, Raleys...everybody does it) insist on employees "re-applying for their jobs", it doesn't sound good when publicized, even if it is just a "re-enter your information into our systems" process. The only time I might see it having a legitimate use is nepotism in family owned companies where someone completely incompetent is placed as a manager of a division they have no business being in...but that doesn't affect most employees.

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Re: Raleys to buy 6 of 8 remaining Scolaris Stores

Post by storewanderer » April 1st, 2018, 10:32 am

Is that how Albertsons did it with Pauls?

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Re: Raleys to buy 6 of 8 remaining Scolaris Stores

Post by pseudo3d » April 1st, 2018, 12:57 pm

storewanderer wrote:
April 1st, 2018, 10:32 am
Is that how Albertsons did it with Pauls?
I don't know (especially since a few Paul's were closed), but I know that Kroger did it with Hiller's. From indications they indicated that everyone that was involved with G&G and Andronico's would be kept, but again, what they say and what they do are different, and since I am several hundred miles away I wouldn't know. My previous grocery experience with an independent did involve nepotism though.

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Re: Raleys to buy 6 of 8 remaining Scolaris Stores

Post by storewanderer » April 1st, 2018, 9:26 pm

pseudo3d wrote:
April 1st, 2018, 12:57 pm
storewanderer wrote:
April 1st, 2018, 10:32 am
Is that how Albertsons did it with Pauls?
I don't know (especially since a few Paul's were closed), but I know that Kroger did it with Hiller's. From indications they indicated that everyone that was involved with G&G and Andronico's would be kept, but again, what they say and what they do are different, and since I am several hundred miles away I wouldn't know. My previous grocery experience with an independent did involve nepotism though.
It seems like in larger transactions, the employees often get kept. But in these smaller transactions involving a few stores is where things seem to get kind of dicey as you point out. Look at Haggen (its sale to Albertsons, as well as its purchase of stores to Albertsons). Look at the purchase of Haggen Stores by Gelson's. Employees were kept, seniority honored, etc.

It will be interesting to hear how this is handled with the purchase of Farm Fresh Stores by the various parties back east...

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