Gelsons opening first of former Haggen locations January 14

California. No non-grocery posts.
Post Reply
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: Gelsons opening first of former Haggen locations January 14

Post by storewanderer »

Haggen South did not execute with much of anything special at all. Had Haggen imported its total OR/WA experience down to Haggen South (including the store layouts and the products, the in store prepared foods, the large in store restaurant seating area, the scratch bakery, etc.) it may have been a different story but they couldn't. They were running what was basically a very poorly put together Unified-supplied store with D rate center store mix and C+ rate at best fresh departments (some good quality items, but a lot of freshness issues).

Gelson's is pushing execution and pushing its perimeter and what is unique to them. They have some special things they do much better and different from the competition in their fresh departments and command a price premium for it. But historically they have operated smaller to medium sized stores. I think their store size is part of what their customer likes. They are not looking for the customer who wants a cartfull of cheap processed foods or has a big family to feed and is on a budget. They seem to be looking for a customer who cooks some foods but wants some fresh but pre-made foods and doesn't care much about having a wide selection of processed foods. There will definitely be some learning curves for them especially on larger stores like Carlsbad and also on stores with pharmacy which creates another element that they need to figure out how to properly exploit. Stater has struggled to make pharmacy profitable even in some of its busier stores so it will be interesting to see how Gelson's does with pharmacy.
veteran+
Valued Contributor
Valued Contributor
Posts: 2233
Joined: January 3rd, 2015, 7:53 am
Has thanked: 1202 times
Been thanked: 71 times
Status: Offline

Re: Gelsons opening first of former Haggen locations January 14

Post by veteran+ »

klkla wrote:
submariner wrote:Gelson's is going to face the same image problems as Haggen. Many people are going to think a store that replaces their old Albertsons or Vons will have the same prices. Haggen and Gelson's just aren't that... they are more upscale, and generally will command a higher price. Unfortunately for Haggen, their expansion ambitions ultimately killed them. Gelson's is taking a more modest approach, allowing shoppers to acclimate to their experience easier.

Oh, and let's face it, for every complaint, there's at least 100 satisfied people who don't write reviews.
I think one of the big differences between Haggen and Gelson's is that Gelson's can deliver the product quality and service that Haggen couldn't in the upscale arena. The Gelson's brand is also more familiar to consumers in LA and Orange County.

It seems like they went out of their way yesterday to make it as obvious as possible that they are not competing for the price sensitive consumer. Most of the negative reviews are always about their prices. The positive reviews are about their selection, product quality and service standards. Those are the customers they are targeting. The ones complaining don't get that they're not the target audience, anyways.

Gelson's gross margins have historically averaged between 38%-43% which are unheard of in the supermarket industry. So they don't necessarily need real high volume stores, yet their average weekly sales are around $700,000 a week so they seem to have found a formula that works for them. The real challenge is can they add 9 stores in one year, going from 18 to 27 stores (a growth rate of 60%) and hold it all together? That amount of growth is nothing compared to what Haggen tried to do but is still a lot to take on in one year.

Spot on klkla!!!

What I cannot understand is people complaining about the prices. It's like someone with a Walmart income going into Tiffany's and trying to buy something.

I mean, what are you doing there anyway?
klkla
Posts: 1614
Joined: February 24th, 2009, 3:26 pm
Been thanked: 2 times
Status: Offline

Re: Gelsons opening first of former Haggen locations January 14

Post by klkla »

veteran+ wrote:It's like someone with a Walmart income going into Tiffany's and trying to buy something.
Good analogy!
klkla
Posts: 1614
Joined: February 24th, 2009, 3:26 pm
Been thanked: 2 times
Status: Offline

Re: Gelsons opening first of former Haggen locations January 14

Post by klkla »

Gelson's posted a video shot partially with a GoPro of the grand opening in Santa Monica last week that includes some interesting before and after shots from Haggen-to-Gelson's at the end. I was told they are waiting on permits for a remodel that will include larger salad bar, service oyster & sushi bar, wine/craft beer bar as well as upgrades to the flooring, decor and lighting.



Next up is Ladera Ranch, a former pavilions, that will open this Thursday.
klkla
Posts: 1614
Joined: February 24th, 2009, 3:26 pm
Been thanked: 2 times
Status: Offline

Re: Gelsons opening first of former Haggen locations January 14

Post by klkla »

So, it's been about a month since Gelson's opened the 6th of 8 former Haggen locations in Laguna Beach. By comparison Smart and Final has opened all their former Haggen locations already.

They had been opening the stores at a rate of one every two to three weeks and would publicise job fairs about a month and a half before the opening. But so far there have been no job fairs for the Thousand Oaks or Pacific Beach locations.

I had to go to the San Fernando Valley yesterday so I decided to drive by the Thousand Oaks location and see how progress was going and was surprised to see they haven't done anything to the store. It still has the Haggen signage outside with no attempt to even cover it up. They haven't made any attempt to cover the windows, either. The inside of the store is exactly as Haggen left it six months ago including their pallet-style produce bins, cash registers, signage, e.t.c... The pharmacy was open and there was a small banner indicating that it is the Gelson's Pharmacy and there were two liquor license applications on the window.

I wonder if this is a sign that the initial stores are not doing as well as planned and they've decided to slow the process down and see if they can get things right. I've heard the Ladera Ranch store is off to a particularly slow start. I hope they are not having serious financial problems.

There's an early 80's build Gelson's in the next city to the south Westlake Village so I checked out that store and it was pretty busy Saturday at around noon. All the perimeter departments were fully stocked so no obvious signs of problems in that store which just received an exterior remodel at the beginning of the year.

Later in the day I was on the westside and stopped by the Gelson's in Santa Monica which is one of the former Haggen stores that opened about three months ago. At 5:30 PM on Saturday it wasn't busy but it wasn't dead, either. Four check stands opened with one to two people in each line and probably 30-40 customers in the store. The store was immaculate. And employees were going out of there way to be helpful. But there's a lot of dead space because the store is so much larger than a typical Gelson's and it just doesn't feel right. There's at least 15-20 feet of dead space between the check stands and the aisle end-caps. They should put some bulk displays or something in that space.

The best way to see if a store is having financial problems is to go to the meat department and look for markdowns and more seasoned-meats than usual. They did have more markdowns than a Gelson's would normally have on a Saturday afternoon but not an overwhelming amount. I noticed they're cutting the meat thinner than other Gelson's and have lowered prices so my instinct is the store is probably not yet profitable and it will probably take some time before it's able to build up to the volume a Gelson's would need to be at to sustain the amount of staffing they had.
rvt
Stock Clerk
Stock Clerk
Posts: 27
Joined: May 16th, 2015, 10:12 am
Status: Offline

Re: Gelsons opening first of former Haggen locations January 14

Post by rvt »

Visited the Ladera Ranch Gelsons just before noon today. I have never been in it before, fairly close to home. I'd rate the customer count as light to moderate. Three registers open with someone checking out in each and maybe a person waiting. The concentration of customers appeared to be in bakery and the prepared food area. They had a salad bar and hot food area looked yummy. The center store was dead, and a few customers were across the store in the produce area. To me this store does not appear especially large, but I also noticed a lot of open space in the store. This in contrast to the Ralphs in Rancho Santa Margarita which is a jumble of displays stuffed everywhere and really quite unattractive on a certain level. But it appears bustling and busy with commerce something the Gelsons does not. Sometimes I wonder if a little chaos helps define "bustling."

It has undergone very little remodeling since Pavilions/Haggen. Temporary banners on the wall over departments. Still appears to be either Pavilion's or Haggen darkish ceiling paint. Generally the store does not look especially upscale. It really seems incomplete. It does look clean, and employees were friendly and approached and offered to help find stuff.

I suspect if they're willing to invest more time and $ in the store they may make it work.
klkla
Posts: 1614
Joined: February 24th, 2009, 3:26 pm
Been thanked: 2 times
Status: Offline

Re: Gelsons opening first of former Haggen locations January 14

Post by klkla »

That doesn't sound too bad RVT. At least there were customers in the store unlike Haggen.

The original plan was to open all the stores with this generic temporary package in Phase 1 while applying for the permits to do the full remodels in Phase 2 which will include wine/craft beer bars, raw seafood bars and other features. They were to install the full decor package at that time, as well.

But for some reason the 1st phase seems to be halted or delayed. Hopefully that won't effect them implementing the 2nd phase in the stores already open.

They also have a new-build store under construction Rancho Mission Viejo at Antonio Parkway & Ortega Highway. It would be interesting to see how construction is proceeding down there but I don't get to the OC too often.
veteran+
Valued Contributor
Valued Contributor
Posts: 2233
Joined: January 3rd, 2015, 7:53 am
Has thanked: 1202 times
Been thanked: 71 times
Status: Offline

Re: Gelsons opening first of former Haggen locations January 14

Post by veteran+ »

klkla wrote:That doesn't sound too bad RVT. At least there were customers in the store unlike Haggen.

The original plan was to open all the stores with this generic temporary package in Phase 1 while applying for the permits to do the full remodels in Phase 2 which will include wine/craft beer bars, raw seafood bars and other features. They were to install the full decor package at that time, as well.

But for some reason the 1st phase seems to be halted or delayed. Hopefully that won't effect them implementing the 2nd phase in the stores already open.

They also have a new-build store under construction Rancho Mission Viejo at Antonio Parkway & Ortega Highway. It would be interesting to see how construction is proceeding down there but I don't get to the OC too often.

Have you had a chance to visit the large Rancho Mirage store that used to be a Pavilions?
klkla
Posts: 1614
Joined: February 24th, 2009, 3:26 pm
Been thanked: 2 times
Status: Offline

Re: Gelsons opening first of former Haggen locations January 14

Post by klkla »

veteran+ wrote:Have you had a chance to visit the large Rancho Mirage store that used to be a Pavilions?
No I haven't. I was hoping to get out to the desert before the weather gets too hot and visit some friends but it doesn't look like I will get the chance until next fall.

The Yelp reviews haven't been that great but a friend of mine was in there last week and said it was doing an OK amount of business and that the store was well-merchandised and clean.
veteran+
Valued Contributor
Valued Contributor
Posts: 2233
Joined: January 3rd, 2015, 7:53 am
Has thanked: 1202 times
Been thanked: 71 times
Status: Offline

Re: Gelsons opening first of former Haggen locations January 14

Post by veteran+ »

klkla wrote:
veteran+ wrote:Have you had a chance to visit the large Rancho Mirage store that used to be a Pavilions?
No I haven't. I was hoping to get out to the desert before the weather gets too hot and visit some friends but it doesn't look like I will get the chance until next fall.

The Yelp reviews haven't been that great but a friend of mine was in there last week and said it was doing an OK amount of business and that the store was well-merchandised and clean.
Ah, okay.

But Yelp in this case is not an accurate assessment because, regarding this neighborhood, you could have a Rolls Royce operation at Walmart prices and they still would not be happy.

Trust me on this one (first hand experience).

lol
Post Reply