Open Discussion: Grocery Formats in Urban WA / OR

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SamSpade
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Open Discussion: Grocery Formats in Urban WA / OR

Post by SamSpade »

I felt like the "hazard pay and announced closure" thread was growing far off topic to talk more about QFC (and even Target) so I thought maybe a more open topic thread would be helpful.

Moderators, not sure if you want to move some of that discussion here as well.

Anyway, as noted, inside Seattle city limits, no Walmart owned stores currently operate. A Sam's Club was on the northern fringe of the city but closed when Walmart made a large store culling a few years back.

When I lived in Seattle (a decade ago now), some store-level managers I'd met that worked at Federal Way Walmart said that the company had planned to bring in Neighborhood Market retail, similar to how they've shoehorned in some locations for the Portland, Ore. metro south of the Columbia River (Clark County, Wash. has several supercenters and a few NMs). Then the company pulled back from NM expansion nationwide and here we are.

Target wise, Brian noted that there were 5 inside Seattle city limits.
They are:
  • Downtown Seattle - Pretty large "grocery" department on the first level. This is a 'city' Target and used the space pretty well.
  • West Seattle (Westwood Village) - Adjacent to a QFC and one of two Targets open in Seattle when I lived there. I believe it was remodeled at the time, but I don't know how much of a pFresh department it received. QFC operates a location in this shopping center.
  • Northgate - This location is on 2 levels of a large 6 (?) story tall shopping center that is definitely going to fit well as Northgate changes over time with the light rail expansion. It was receiving a pFresh remodel when I moved.
  • Ballard - New location that is in the first floor of a building, looks to be sized at the new "express" size
  • U District - Looks to be "express" sized with convenience grocery built in a former bank branch
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What is a QFC exactly?

Post by SamSpade »

storewanderer wrote: February 20th, 2021, 11:13 pm I think QFC commands higher pricing than Fred Meyer; it previously did have some better quality meat and deli items than Fred Meyer, and the attitude and appearance of the employees in the QFC Stores historically has been more professional (as in top of the line). Also those smaller QFC Stores tended to be rather low on private label product mix (very odd for a Kroger operation, but understandable given the demographic targeted); instead favoring more "gourmet" or regional branded items in center store. Maybe none of that is so much anymore after what Kroger has done the past few years...
QFC does carry some regional items that are not even necessarily carried at Fred Meyer, it really jumps out in the walk down the coffee and tea aisle.

QFC is also (as far as I know) the only Portland area grocer to sell Certified Angus Beef label beef. I think almost every other grocer (including WinCo and Walmart) is selling at least choice-grade beef cuts, but only at the natural grocers (New Seasons, Market of Choice) or high-end (Zupans) do you have a branded label.

I think all the deli locations carry Boars Head meat and cheese and all bakeries have Top Pot Doughnuts and Cyrus O'Leary pies and Schwartz Brothers Bakery items.

Otherwise, yes, as noted, center store is pretty typical generic grocer USA with fewer store brands than some chains and a bit higher price point than Fred Meyer on everything.

Some locations are open 24/7. That used to be every location but that was changing before the COVID-19 pandemic. Most don't have pharmacies, sometimes due to space constraints.
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Re: What is a QFC exactly?

Post by babs »

SamSpade wrote: February 22nd, 2021, 11:48 am I think all the deli locations carry Boars Head meat and cheese
Fred Meyer Carry's Boar's Head in their deli at all locations. It's why Zupans dropped it.
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Re: What is a QFC exactly?

Post by storewanderer »

babs wrote: February 22nd, 2021, 6:48 pm
SamSpade wrote: February 22nd, 2021, 11:48 am I think all the deli locations carry Boars Head meat and cheese
Fred Meyer Carry's Boar's Head in their deli at all locations. It's why Zupans dropped it.
I think QFC has been offering Boar's Head for quite a bit longer than Fred Meyer. I know 10 years ago it was in most QFCs but not in many Fred Meyer locations. As of a couple years ago the QFC in Lacey still did not have Boar's Head though.

Is Safeway/Albertsons carrying Boar's Head in OR/WA yet? In NorCal, Safeway is heavily marketing Boar's Head, even with exterior signage on remodeled stores. At 12.99/lb for ham and turkey I think the price is too high and I don't see many people buying it by the pound. In Reno/Sparks Safeway cut the Boar's Head ham and turkey to 10.99/lb to match Smiths and Sprouts and I am seeing some people buying it there (but nowhere near as many people there as Smiths; and hardly anyone buys it at Sprouts). However Safeway does heavy sandwich volume in quite a few locations and those are using the Boar's Head meats. Sandwich with .2 lb of meat for 6.99.

Before Scolaris sold its stores here (that was only what 3 years ago) in Reno/Sparks they carried Boar's Head ham at 8.99/lb and turkey at 9.99/lb. Also Holiday with stores in rural NorCal has Boar's Head under that general pricing structure to this day (may be 9.99/lb for ham and turkey now). It seems Boar's Head movement from smaller chains into larger chains has resulted in price increases for some reason.
Last edited by storewanderer on February 22nd, 2021, 9:33 pm, edited 1 time in total.
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Re: What is a QFC exactly?

Post by marshd1000 »

babs wrote: February 22nd, 2021, 6:48 pm
SamSpade wrote: February 22nd, 2021, 11:48 am I think all the deli locations carry Boars Head meat and cheese
Fred Meyer Carry's Boar's Head in their deli at all locations. It's why Zupans dropped it.
Maybe in Portland may all Fred Meyer stores carry Boar’s Head but it doesn’t seem that way here in Washington. Where I live in Renton, the downtown Renton Center Fred Meyer has Columbus meats but the Benson Plaza store has Boar’s Head!
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Re: Open Discussion: Grocery Formats in Urban WA / OR

Post by pseudo3d »

I had written something out like this before my login timed out and it got wiped, but QFC just seems like an oddity in the Kroger family that doesn't belong anymore. It's not very widespread (it just has locations in Portland and Seattle, not the eastern parts of those states where Albertsons/Safeway dominate), it has no large "Marketplace" stores like other divisions do (there's the Broadway Market QFC, which has some Fred Meyer non-food sections like bath towels but the store is only 65k square feet), and with the changes to Fred Meyer that make it more like the rest of the Kroger stores (culling GM, adding the card, etc.) it just seems that QFC is not really something that Kroger wants to maintain.

While they (Kroger) did open a 50k square foot QFC in Kirkland about two years ago, Kroger seems to want to get rid of QFC, but has no real reason to. One of the most telling things is that Kroger used the term "accelerating" the closure of the QFC stores that had to pay the extra hazard pay, indicating that those stores were already on the outs anyway. Obviously, it doesn't make sense to dump QFC entirely all at once--there's no other traditional grocer (to my knowledge) in those areas except for Albertsons/Safeway, the stores are still profitable, and Fred Meyer hasn't gotten diluted enough to the point where they can expand the name to QFC.

With the Kirkland store, it seems to give off a bit of a Mariano's vibe (at first glance), which could probably benefit the remaining QFC stores but it doesn't look like Kroger really wants to push it the chain that way (especially seeing how the QFC stores tend to be on the small side). Maybe there might have been plans to revamp the QFC stores into something more akin to Mariano's, but it was scrapped (and meanwhile back home, the lower-end Mariano's are becoming more ordinary).

I did some reading into QFC, in 1996, it bought Hughes Market in California with the intention of creating some sort of smaller, upscale grocery stores across the country with their own regional names, but with the Fred Meyer acquisition in 1997, it ended that, and Fred Meyer rebranded Hughes into Ralphs, which it had acquired around the same time, and then, of course, Fred Meyer was acquired by Kroger. Whatever plans Fred Meyer had for QFC were quickly lost under Kroger (Kroger scrapped expansion of full Fred Meyer stores early on), and further homogenization has only hurt the chain. (I believe that the "Fresh Fare" package did come out of QFC, but when it swept the chain to the point where even old, greenhouse stores were getting some flavor of it, it didn't exactly make QFC look better by comparison).
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Re: Open Discussion: Grocery Formats in Urban WA / OR

Post by babs »

pseudo3d wrote: February 24th, 2021, 12:14 pm I had written something out like this before my login timed out and it got wiped, but QFC just seems like an oddity in the Kroger family that doesn't belong anymore. It's not very widespread (it just has locations in Portland and Seattle, not the eastern parts of those states where Albertsons/Safeway dominate), it has no large "Marketplace" stores like other divisions do (there's the Broadway Market QFC, which has some Fred Meyer non-food sections like bath towels but the store is only 65k square feet), and with the changes to Fred Meyer that make it more like the rest of the Kroger stores (culling GM, adding the card, etc.) it just seems that QFC is not really something that Kroger wants to maintain.

While they (Kroger) did open a 50k square foot QFC in Kirkland about two years ago, Kroger seems to want to get rid of QFC, but has no real reason to. One of the most telling things is that Kroger used the term "accelerating" the closure of the QFC stores that had to pay the extra hazard pay, indicating that those stores were already on the outs anyway. Obviously, it doesn't make sense to dump QFC entirely all at once--there's no other traditional grocer (to my knowledge) in those areas except for Albertsons/Safeway, the stores are still profitable, and Fred Meyer hasn't gotten diluted enough to the point where they can expand the name to QFC.

With the Kirkland store, it seems to give off a bit of a Mariano's vibe (at first glance), which could probably benefit the remaining QFC stores but it doesn't look like Kroger really wants to push it the chain that way (especially seeing how the QFC stores tend to be on the small side). Maybe there might have been plans to revamp the QFC stores into something more akin to Mariano's, but it was scrapped (and meanwhile back home, the lower-end Mariano's are becoming more ordinary).

I did some reading into QFC, in 1996, it bought Hughes Market in California with the intention of creating some sort of smaller, upscale grocery stores across the country with their own regional names, but with the Fred Meyer acquisition in 1997, it ended that, and Fred Meyer rebranded Hughes into Ralphs, which it had acquired around the same time, and then, of course, Fred Meyer was acquired by Kroger. Whatever plans Fred Meyer had for QFC were quickly lost under Kroger (Kroger scrapped expansion of full Fred Meyer stores early on), and further homogenization has only hurt the chain. (I believe that the "Fresh Fare" package did come out of QFC, but when it swept the chain to the point where even old, greenhouse stores were getting some flavor of it, it didn't exactly make QFC look better by comparison).
I can tell you what Fred Meyers plan was for QFC when they bought them.. They viewed it as a no-brainer. Just by switching distribution from Associated Grocers to their new warehouse in Seattle, it would pay for the transaction in two years. In both the Portland and Seattle markets, they viewed QFC as the way to get into locations where they couldn't build their large format stores. They were planning on adding more stores. And then they merged with Kroger.
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Re: Open Discussion: Grocery Formats in Urban WA / OR

Post by storewanderer »

babs wrote: February 24th, 2021, 8:15 pm
I can tell you what Fred Meyers plan was for QFC when they bought them.. They viewed it as a no-brainer. Just by switching distribution from Associated Grocers to their new warehouse in Seattle, it would pay for the transaction in two years. In both the Portland and Seattle markets, they viewed QFC as the way to get into locations where they couldn't build their large format stores. They were planning on adding more stores. And then they merged with Kroger.
Fred Meyer had a lot of different plans before Kroger merged it in.

Fred Meyer was going to build full size Fred Meyer format stores in Arizona. And I suspect they had other territories planned as well. Kroger was so against that they didn't open a fully built store.

Fred Meyer was expanding Ralphs into NorCal with that Albertsons/Lucky divest purchase. Kroger went along with that one but we see what they ultimately did with it.

I think the QFC, Ralphs, and Fred Meyer operation would have been much stronger and more dominant had Fred Meyer remained an independent company. I do think the affiliation with Kroger was a positive for Smiths. I don't think Smiths and Fred Meyer were a great fit really (geographically yes, but that is about where it stopped). However Smiths was a pretty good fit for Kroger.

I also think the affiliation with Fred Meyer was a positive for Kroger. Fred Meyer brought very strong general merchandise programs to Kroger as well as a strong natural foods program. Fred Meyer also brought various diverse private labels to Kroger (not only the general merchandise ones but also the Natural Choices, the Private Selection, the FMV, the Buena Comida) that supplemented Kroger's strong grocery but very "plain vanilla" private label program.
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Re: Open Discussion: Grocery Formats in Urban WA / OR

Post by pseudo3d »

babs wrote: February 24th, 2021, 8:15 pm
I can tell you what Fred Meyers plan was for QFC when they bought them.. They viewed it as a no-brainer. Just by switching distribution from Associated Grocers to their new warehouse in Seattle, it would pay for the transaction in two years. In both the Portland and Seattle markets, they viewed QFC as the way to get into locations where they couldn't build their large format stores. They were planning on adding more stores. And then they merged with Kroger.
Well, everyone loves new stores (between Safeway, Albertsons, and Kroger, who knows how many chains they sniffed at) and bolstering a metro area's base to lock out competitors is always a nice bonus.

But Fred Meyer had its own plans for the chain. We do know they ditched QFC's plan to run Hughes as basically a California version of QFC, instead converting the Hughes stores to the stronger (but more conventional) Ralphs brand. Meanwhile, they converted Smitty's in Arizona to Fred Meyer Marketplace, with (as storewanderer says) to build Fred Meyer stores there, with likely other plans as well (Colorado, etc.), and perhaps longer-range, they might've renamed Smith's and QFC as well (Smith's failure in California with their bigger-than-average stores probably wouldn't have bode well for Fred Meyer). They had bought three chains in 1997: Ralphs (from Yucaipa Cos.), QFC, and Smith's. They must have had some grander plan for them, just as Albertsons had bought American Stores a year or two later with the idea of running a drug store chain alongside a nationwide Albertsons brand.

Grand plans, of course, change. Albertsons' was sunk just a few years after the American Stores purchase, with divisions shuttered and plans to rebrand further stores as Albertsons scrapped (the LLC/SuperValu split was still a few years away), and likewise, Kroger's plan for QFC and the rest of the FM-owned traditional supermarkets was substantially different than Fred Meyer's.

And so that leaves us with the situation today, a parent company that today is pushing homogenization with several divisions and groups of stores that aren't quite as well-suited to adapt, QFC being one of them. I don't think that Kroger will sell or close QFC (we'd see smaller markets chopped off and Harris Teeter on the sale block before that would happen), but they are going to have to make a definitive choice: mark QFC as being notably more upscale than other divisions, or make it indistinguishable with the increasingly-groceryized Fred Meyer (and by extension, the rest of the chain). The way things are going looks like to be the latter.
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Re: Open Discussion: Grocery Formats in Urban WA / OR

Post by klkla »

pseudo3d wrote: February 25th, 2021, 2:39 amBut Fred Meyer had its own plans for the chain. We do know they ditched QFC's plan to run Hughes as basically a California version of QFC, instead converting the Hughes stores to the stronger (but more conventional) Ralphs brand.
I wouldn't say that Ralphs was a stronger brand at all. Hughes had the highest sales per sq. ft. in SoCal when they were acquired by QFC. Ralphs just wanted to get rid of them as a competitor and that's what happened.
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