Gelsons opening first of former Haggen locations January 14

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Re: Gelsons opening first of former Haggen locations January 14

Post by storewanderer »

Gelson's may have erred by taking on such large square footages. I was really wondering about this. They will need to get creative with this to make it work. And it will be a steep hill to climb. Do they want to try and build center store volume (this means a different mix and different ad style than they have done in the past) or do they want to try and build on what they have, which is basically a gourmet perimeter heavy format where center store is there but clearly not the focus. They probably need to look to a lot of things like what Whole Foods does with prepared foods, seating areas inside/outside, bars in store, etc.

Gelson's may want to look at Nugget in NorCal for some ideas on how to handle the large square footage with this type of format.

These reports sound a bit too similar to Haggen's condition.

Both rely (relied, in the case of Haggen) on Unified for center store (is there any other choice though?)... I still think this is the problem. Maybe it is time for Unified to step it up and start providing better promotion/support. Associated Salt Lake City does this great for its customers. The quality of bakery/deli is pretty bad in a lot of the Associated supplied stores and it is clear Associated Salt Lake doesn't really help these stores out much with those but Gelson's already has great perimeter programs of its own, they just need something that will get competitive mix and pricing in center store, and promotions that will drive traffic.
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Re: Gelsons opening first of former Haggen locations January 14

Post by pseudo3d »

storewanderer wrote:Gelson's may have erred by taking on such large square footages. I was really wondering about this. They will need to get creative with this to make it work. And it will be a steep hill to climb. Do they want to try and build center store volume (this means a different mix and different ad style than they have done in the past) or do they want to try and build on what they have, which is basically a gourmet perimeter heavy format where center store is there but clearly not the focus. They probably need to look to a lot of things like what Whole Foods does with prepared foods, seating areas inside/outside, bars in store, etc.

Gelson's may want to look at Nugget in NorCal for some ideas on how to handle the large square footage with this type of format.

These reports sound a bit too similar to Haggen's condition.

Both rely (relied, in the case of Haggen) on Unified for center store (is there any other choice though?)... I still think this is the problem. Maybe it is time for Unified to step it up and start providing better promotion/support. Associated Salt Lake City does this great for its customers. The quality of bakery/deli is pretty bad in a lot of the Associated supplied stores and it is clear Associated Salt Lake doesn't really help these stores out much with those but Gelson's already has great perimeter programs of its own, they just need something that will get competitive mix and pricing in center store, and promotions that will drive traffic.
If the rest of the programs (perimeter programs, mostly) can pay for the rent, could they cut center store mix for a roomier store, thus giving it something more unique and creating something more akin to their smaller stores?
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Re: Gelsons opening first of former Haggen locations January 14

Post by klkla »

storewanderer wrote:Both rely (relied, in the case of Haggen) on Unified for center store (is there any other choice though?)... I still think this is the problem. Maybe it is time for Unified to step it up and start providing better promotion/support.
I would have to do some research but I remember something from Gelson's when they were public saying they get about 30% of their inventory from Unified.

They recently opened a new distribution center that is nearly three times the size of the warehouse they inherited from the Mayfair era. They also buy a lot of their center store product from Young's Market and other specialty distributors. So I don't think that's the problem.

They're used to stores in the 25,000 - 35,000 sq. ft. range where they can be very disciplined about the products they carry. For these very large stores they need to implement Phase 2 and get these Raw Bars, Wine/Craft Beer Bars and other specialty departments going so they can prune the product selection in center store and regain their focus.
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Re: Gelsons opening first of former Haggen locations January 14

Post by veteran+ »

klkla wrote:
storewanderer wrote:Both rely (relied, in the case of Haggen) on Unified for center store (is there any other choice though?)... I still think this is the problem. Maybe it is time for Unified to step it up and start providing better promotion/support.
I would have to do some research but I remember something from Gelson's when they were public saying they get about 30% of their inventory from Unified.

They recently opened a new distribution center that is nearly three times the size of the warehouse they inherited from the Mayfair era. They also buy a lot of their center store product from Young's Market and other specialty distributors. So I don't think that's the problem.

They're used to stores in the 25,000 - 35,000 sq. ft. range where they can be very disciplined about the products they carry. For these very large stores they need to implement Phase 2 and get these Raw Bars, Wine/Craft Beer Bars and other specialty departments going so they can prune the product selection in center store and regain their focus.
Spot on!

I think with their new found capital Phase 2 is in sight.

When I shopped at Gelson's (Franklin av. and also Santa Monica Bl. and even Malibu) I thought they did a decent job on center store (for my needs) and never heard a complaint from fellow customers. Remember, price is not what they are about.

It was a real pleasure shopping (100% better than Publix's claim of "where shopping is a pleasure") there with awesome service, fresh and quality products, awesome sanitation standards, great perimeter departments and fun and interesting gourmet/exotic foods (100% better than Jensen's in the desert).

Knowing Gelson's (and even the former Mayfairs) very well, the first question I asked way back when this started was: What will they do with these much larger stores?

I think Phase 2 answers that plus do not be surprised if they come up with some of the things storewanderer posited (but not price) and MORE! I am sure they will approach this new adventure with aplomb and great execution.
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Re: Gelsons opening first of former Haggen locations January 14

Post by klkla »

It turns out the Pacific Beach store will open this Thursday. According to this article it will be the first of the former Haggen stores to open with a fully completed remodel:
http://sdnews.com/view/full_story/27190 ... iness_page

This store will be Gelson's smallest store at around 17,000 sq. ft. (Currently the West Hollywood store is smallest at 18,000 sq. ft.).

That leaves just the previously mentioned Thousand Oaks store. It was in pretty rough condition so maybe the delay in opening it is because they want to do a full remodeling as well? If that's the case I wouldn't expect it top open before next fall.
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Re: Gelsons opening first of former Haggen locations January 14

Post by CalItalian »

Here's an update on the future (new build) Gelsons Manhattan Beach
http://www.dailybreeze.com/business/201 ... lsons-plan
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Re: Gelsons opening first of former Haggen locations January 14

Post by klkla »

I give the Manhattan Beach store a 50/50 chance of ever being opened at this point. The NIMBY's that live behind the property are very determined to prevent this store from ever opening.

I've noticed Gelson's is starting to become much more aggressive with promotions lately. I had posted about them running bigger ads a couple weeks ago but they're also doing more targeted marketing. For instance yesterday I spent $91.82 on groceries and my receipt had a coupon for $16 off my next purchase of $90 or more. This is the third time this has happened to me in the last couple of months. It doesn't happen all the time or to every customer. I'm not sure what the criteria is for this offer which amounts to a 17% discount on my next order but I like it :)
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Re: Gelsons opening first of former Haggen locations January 14

Post by storewanderer »

If you are using credit/debit, I wonder if they are tracking purchases by card number and issuing coupons accordingly. A quasi-loyalty card of sorts.

I have noticed some Catalina offers triggered based on credit/debit card used. But I don't think Gelson's uses Catalina?
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Re: Gelsons opening first of former Haggen locations January 14

Post by klkla »

I have been in two of the former Haggen stores over that last two weeks and have some updates:

Santa Monica - I was in that store this afternoon and it was fairly busy with five checkstands open and around 30-40 people in the store. Evidently they started the remodel last month and built the new cheese counter, sushi bar and raw bar (basically a self service poke/ceviche counter) but then suddenly stopped the project. I asked an employee what was going on and he didn't know. He said they just stopped. He thinks the problem might have to do with getting the liquor license for the next phase which would be a wine/beer/tapas bar that is supposed to be in the middle of the store. It just seemed strange because they even removed the construction equipment that would normally be outside during a remodel.

Rancho Mirage - I was in that store last Saturday afternoon and they also had five checkstands open but clearly not as many customers in the store. Like Santa Monica they have signs and diagrams all around the store promoting the remodel listing some of the features as coming in December 2016 and January 2017 but here we are in March and no work has been started.

I also haven't seen anything about the new store in Rancho Mission Viejo which was supposed to open late last year. The recent storms caused some damage to Ortega Highway so that might have something to do with it.

Also, no news on the former Haggen in Thousand Oaks. It's been well over a year since they acquired the store and it hasn 't opened yet.

I don't know if there's any significance to the lack of activity that was supposed to be happening by this point on these projects. Hopefully these are not early signs of financial problems and just bumps in the road with permits and licensing.
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Re: Gelsons opening first of former Haggen locations January 14

Post by storewanderer »

I suspect these are signs they are having problems with these stores and they are trying to figure out what to do before throwing more good money after bad.

Starting a remodel then stopping before it finished is troubling. Removing the construction equipment is understandable in a sense since it was just taking up space in a somewhat space challenged store/lot but still, it is strange.

How did perimeters and service levels look in these stores?
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