Ralphs Riverside Closing Nov. 11, Stater Bros. to replace

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Re: Ralphs Riverside Closing Nov. 11, Stater Bros. to replace

Post by klkla »

storewanderer wrote:Last ditch effort to save performance by doing a remodel?
That could be part of it. I think the bigger issue has to deal with the expansion of non-union price impact chains like Aldi and Smart & Final. These remodels were done before Aldi announced their expansion and before Smart & Final picked up so many Haggen locations.

Ralph has so many locations in high income areas where they will not have to compete with these low-priced entities. They are aggressively remodeling these type of stores. I think Ralphs role within Kroger will be to be the 'cash cow' that provides cash flow going forward with minimal investment in second-tier locations.
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Re: Ralphs Riverside Closing Nov. 11, Stater Bros. to replace

Post by arizonaguy »

klkla wrote:
storewanderer wrote:Last ditch effort to save performance by doing a remodel?
That could be part of it. I think the bigger issue has to deal with the expansion of non-union price impact chains like Aldi and Smart & Final. These remodels were done before Aldi announced their expansion and before Smart & Final picked up so many Haggen locations.

Ralph has so many locations in high income areas where they will not have to compete with these low-priced entities. They are aggressively remodeling these type of stores. I think Ralphs role within Kroger will be to be the 'cash cow' that provides cash flow going forward with minimal investment in second-tier locations.
It's just interesting to see how different Ralph's and Fry's operate.

Fry's has dozens of second-tier locations that they still try to make work.

With Ralph's, it seems that unless a location is a very high performer, Ralph's isn't interested in keeping it.

The only difference I can see is that Kroger owns most of its Fry's locations, including the marginal ones.
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Re: Ralphs Riverside Closing Nov. 11, Stater Bros. to replace

Post by storewanderer »

Smiths owns quite a few of its stores too and I think that is why some previously marginal locations (some of which have turned into solid performers) were kept over the years and few if any have closed. In fact, most of the stores they've closed have been ones they got from other parties that were leased (like a former Furrs somewhere in rural NM, and two former Raleys/Albertsons in Las Vegas). I can think of one legacy Smiths closed in Albuquerque though (in that case a former Furrs down the road was kept).

Ralphs may also not be wanting to keep marginal locations (even if owned) going due to the higher property taxes and higher operating costs in general in California vs. some of these other places.
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Re: Ralphs Riverside Closing Nov. 11, Stater Bros. to replace

Post by submariner »

storewanderer wrote:
At the same time I am not quite sure these Ralphs closing in Buena Park and Riverside are closing due to poor performance. It almost looks as if the landlords would rather have tenants other than Ralphs in these stores...
You could be right. The Yelp page seems to have commenters pointing to the Buena Park location being replaced with a Sprouts. Sprouts is a small step up in demographics, but not enough to indicate a significant demographic change that would prompt Ralphs to close up shop.

It is a smaller store though, I believe built around the mid 80's. The shopping center has always been strong, with good tenants. across the street is a Stater Bros. (formerly an Albertsons). In it's heyday the center featured Ralphs, CVS (later SavOn Express when CVS left California), Music Plus, and Miller's Outpost. Even now Ralphs and Petco remain strong anchors.

Across the street though, the Kohl's (née Mervyns) recently closed. Still, I don't think it's enough of an impact for the rest of the shops at the intersection.

The next nearest Ralphs is 2 miles west on Ball road (former Alpha Beta), so it could have just been proximity.
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Re: Ralphs Riverside Closing Nov. 11, Stater Bros. to replace

Post by CalItalian »

klkla wrote:
storewanderer wrote:Last ditch effort to save performance by doing a remodel?
That could be part of it. I think the bigger issue has to deal with the expansion of non-union price impact chains like Aldi and Smart & Final. These remodels were done before Aldi announced their expansion and before Smart & Final picked up so many Haggen locations.

Ralph has so many locations in high income areas where they will not have to compete with these low-priced entities. They are aggressively remodeling these type of stores. I think Ralphs role within Kroger will be to be the 'cash cow' that provides cash flow going forward with minimal investment in second-tier locations.
Aldi is having no impact in Southern California. Most of their stores so far are not opening near a Ralphs. There is too much competition, lower priced with better selection tailored to this market than them, in SoCal for them to survive. I've been in 3 locations and none of the locations have had more than 10 customers when I've been in the stores at prime shopping hours. They will completely fail in Southern California. After their initial spurt of openings, there is no buzz about them at all. I hear more buzz for Grocery Outlet locations opening.

As for Smart & Final, although I initially saw a number of customers just after their grand opening in locations such as Torrance, which is a former large Albertsons, you can now enter that store, for example, at most any hour and hear a pin drop. Sad since, at least for that location, that was a very attractive store. Seen a similar drop off in their San Pedro and Redondo Beach former Albertsons locations.

Ralphs, in most cases except with landlords (they also lost their Hermosa Beach location because of a landlord which just reopened as a Trader Joes a week ago which the landlord wanted), is closing locations because of ethnic changes. They are leaving areas with heavy immigrated Asian and Hispanic residents, illegal or legal. San Gabriel Valley is a classic example of that for Ralphs. Their Food 4 Less division also can't compete in areas with many Hispanic targeted non-union grocers.
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Re: Ralphs Riverside Closing Nov. 11, Stater Bros. to replace

Post by storewanderer »

Smart & Final Extra just remodeled its Reno store (which was one of the first if not the first "Extra" Store) and it is noticeably improved. This is a pretty strong store, I estimate it does about $400,000 a week in sales if not more. They expanded meat, added in bulk food, expanded produce, started to sell hot roasted chicken, and have added a ton of mix to center store. I almost feel like I am in a F4L now (thanks to the management who came from there) as far as the mix goes. The pricing is not good (way out of line compared to Smiths but that is 8 miles away), but better than nearby competition. The store's main competition is a Save Mart and the area is a very mixed part of town (part hispanic, part middle lower class white, part middle class white) and a 15,000 square foot or so Marketon. Marketon has great prices and does a great job on perishables but is awful on center store pricing now and due to limited space has a limited mix. 90% of the customers at Marketon are hispanic so for a lot of people the choice is between Save Mart and Smart & Final in this area. Smart & Final's customer base is noticeably mixed and Save Mart has few hispanic customers (probably because they caught on to the high prices and terrible quality).

I do not like Smart & Final mainly because I think their pricing is terrible for their format and mix historically has been poor in my view (though the mix in Reno is now good enough for me). I would not shop there if I had a choice. I guess when the nearby choice is Save Mart it is a a decision of worse or more worse.

When I see these low service formats replacing a full service conventional I am disappointed. The low service formats seem to have fewer employees, less traffic, and higher prices. This seems to be happening a lot in SoCal in particular. Ralphs seems to be the one losing the most locations to these things.

Does Ralphs have any new stores planned?
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Re: Ralphs Riverside Closing Nov. 11, Stater Bros. to replace

Post by veteran+ »

CalItalian wrote:
klkla wrote:
storewanderer wrote:Last ditch effort to save performance by doing a remodel?
That could be part of it. I think the bigger issue has to deal with the expansion of non-union price impact chains like Aldi and Smart & Final. These remodels were done before Aldi announced their expansion and before Smart & Final picked up so many Haggen locations.

Ralph has so many locations in high income areas where they will not have to compete with these low-priced entities. They are aggressively remodeling these type of stores. I think Ralphs role within Kroger will be to be the 'cash cow' that provides cash flow going forward with minimal investment in second-tier locations.
Aldi is having no impact in Southern California. Most of their stores so far are not opening near a Ralphs. There is too much competition, lower priced with better selection tailored to this market than them, in SoCal for them to survive. I've been in 3 locations and none of the locations have had more than 10 customers when I've been in the stores at prime shopping hours. They will completely fail in Southern California. After their initial spurt of openings, there is no buzz about them at all. I hear more buzz for Grocery Outlet locations opening.

As for Smart & Final, although I initially saw a number of customers just after their grand opening in locations such as Torrance, which is a former large Albertsons, you can now enter that store, for example, at most any hour and hear a pin drop. Sad since, at least for that location, that was a very attractive store. Seen a similar drop off in their San Pedro and Redondo Beach former Albertsons locations.

Ralphs, in most cases except with landlords (they also lost their Hermosa Beach location because of a landlord which just reopened as a Trader Joes a week ago which the landlord wanted), is closing locations because of ethnic changes. They are leaving areas with heavy immigrated Asian and Hispanic residents, illegal or legal. San Gabriel Valley is a classic example of that for Ralphs. Their Food 4 Less division also can't compete in areas with many Hispanic targeted non-union grocers.

I have to echo your posit on Aldi and Smart/Final.

My empirical experiences, coupled with ongoing conversations with management, support your observations.
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Re: Ralphs Riverside Closing Nov. 11, Stater Bros. to replace

Post by veteran+ »

storewanderer wrote:Smart & Final Extra just remodeled its Reno store (which was one of the first if not the first "Extra" Store) and it is noticeably improved. This is a pretty strong store, I estimate it does about $400,000 a week in sales if not more. They expanded meat, added in bulk food, expanded produce, started to sell hot roasted chicken, and have added a ton of mix to center store. I almost feel like I am in a F4L now (thanks to the management who came from there) as far as the mix goes. The pricing is not good (way out of line compared to Smiths but that is 8 miles away), but better than nearby competition. The store's main competition is a Save Mart and the area is a very mixed part of town (part hispanic, part middle lower class white, part middle class white) and a 15,000 square foot or so Marketon. Marketon has great prices and does a great job on perishables but is awful on center store pricing now and due to limited space has a limited mix. 90% of the customers at Marketon are hispanic so for a lot of people the choice is between Save Mart and Smart & Final in this area. Smart & Final's customer base is noticeably mixed and Save Mart has few hispanic customers (probably because they caught on to the high prices and terrible quality).

I do not like Smart & Final mainly because I think their pricing is terrible for their format and mix historically has been poor in my view (though the mix in Reno is now good enough for me). I would not shop there if I had a choice. I guess when the nearby choice is Save Mart it is a a decision of worse or more worse.

When I see these low service formats replacing a full service conventional I am disappointed. The low service formats seem to have fewer employees, less traffic, and higher prices. This seems to be happening a lot in SoCal in particular. Ralphs seems to be the one losing the most locations to these things.

Does Ralphs have any new stores planned?
I'm trying to find out about new store openings. My connections, so far, know of none.

Side note: That is why I left in 2007..........very little opportunity for advancement.
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Re: Ralphs Riverside Closing Nov. 11, Stater Bros. to replace

Post by klkla »

veteran+ wrote: I have to echo your posit on Aldi and Smart/Final.

My empirical experiences, coupled with ongoing conversations with management, support your observations.
Exactly. Some of the stores being closed have been remodeled in the last three to five years. So clearly the thinking three to five years ago was that these stores would be kept open.

So what has changed during that time period? The ethnic make-up has not changed. The increase in Latino and Asian populations has been going on for years. The opening of new Asian and Latino markets has actually slowed down a little compared to ten years ago. The only thing different is this explosion of low-coast entrants which is what makes me think that is more likely the cause for Ralphs' change in strategy.
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Re: Ralphs Riverside Closing Nov. 11, Stater Bros. to replace

Post by pseudo3d »

klkla wrote:
veteran+ wrote: I have to echo your posit on Aldi and Smart/Final.

My empirical experiences, coupled with ongoing conversations with management, support your observations.
Exactly. Some of the stores being closed have been remodeled in the last three to five years. So clearly the thinking three to five years ago was that these stores would be kept open.

So what has changed during that time period? The ethnic make-up has not changed. The increase in Latino and Asian populations has been going on for years. The opening of new Asian and Latino markets has actually slowed down a little compared to ten years ago. The only thing different is this explosion of low-coast entrants which is what makes me think that is more likely the cause for Ralphs' change in strategy.
I'm not going to go off on a tangent regarding unions and my opinion of them, but a company just can't retreat when it smells competition, that's incredibly bad business decisions. The wide swath of destruction from Walmart has been from companies who largely could not or did not conform to the future. We all know that a handful of nice, profitable stores is not going to carry a division or a company in the long run.
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