Baker City, OR to get a second Safeway

[SamSpade]

Albertsons Express is USA Gasoline. The ones in the Portland area have all been re-branded to Mobil I believe.
In my visit, there was a bakery area with the usual Safeway layout of self-serve donuts behind glass, baskets of bagels, baguettes and the like but I don't remember seeing a traditional cake case. The shelving in the bakery department where breakfast breads, cookies, etc. are usually stocked was very empty on Sunday. Maybe they are only employing one bakery staff and then driving product across the street? Oregon's labor market is good, but not that good in Baker City I'd think. Perhaps they are still working out schedules / logistics between the two at the moment? I will probably be back through in late November.

[storewanderer]

That is really funny if they are not running the bakery in this store but just supplying it from the Safeway across the street. Given this is the larger store you would think they would use this store. This may be a situation where Safeway with its large full bakery production area to support a scratch baking operation is being used because the size of the bakery preparation area in the Albertsons has too many freezers and too little preparation area. Some Albertsons built frmo 1992-1996 specifically have super tiny bakery preparation areas, never any way you could do a scratch baking program in them. But this store is newer and some of the newer ones I've seen looked to have larger bakery prep areas (not sure why since they stopped scratch baking in the early 90's).

[SamSpade]

Around the time Rite Aid and Albertsons could be merging, Baker City, Oregon should have a Grocery Outlet.

Also, the GO is being built from the ground up. I've not seen that in a long time. http://www.bakercityherald.com/news/617 ... ndbreaking

[Super S]

Grocery Outlet just finished construction on a new-build store in Rainier, Oregon, where a new-build Dollar General just opened.

As for Baker City...I still don't understand how Albertsons can get away with having two stores so close together, possibly three if the Rite Aid deal goes through. It is an example of how some areas are falling through the cracks regarding antitrust laws.

[a42887]

As for Baker City...I still don't understand how Albertsons can get away with having two stores so close together, possibly three if the Rite Aid deal goes through. It is an example of how some areas are falling through the cracks regarding antitrust laws.

This is really not uncommon given the situation; it has played out several other places. The store was originally closed (or some others divested), likely due to antitrust issues. Then, when it sits empty (or the other store closes and it sits empty) for a period of time, they come back and re-open. The likely argument is that they left it to sit for a bit, no one else wanted to move in, so at least they're bringing jobs back. Especially in places like this (before Grocery Outlet built their store), they didn't gain market share per-se, they simply gave people a second location to split the market share they already had between stores. Its not like they were stealing business from the other store down the street...

[Super S]

As for Baker City...I still don't understand how Albertsons can get away with having two stores so close together, possibly three if the Rite Aid deal goes through. It is an example of how some areas are falling through the cracks regarding antitrust laws.

This is really not uncommon given the situation; it has played out several other places. The store was originally closed (or some others divested), likely due to antitrust issues. Then, when it sits empty (or the other store closes and it sits empty) for a period of time, they come back and re-open. The likely argument is that they left it to sit for a bit, no one else wanted to move in, so at least they're bringing jobs back. Especially in places like this (before Grocery Outlet built their store), they didn't gain market share per-se, they simply gave people a second location to split the market share they already had between stores. Its not like they were stealing business from the other store down the street...

However, at one point, the Albertsons and Safeway stores were two different companies. They technically have stolen some business simply by merging. I have to wonder if there is a lease issue with one and/or both stores which prevents them from backing out...it seems like it would make sense to combine into whichever store is the better of the two from an operational standpoint. I could maybe see if the two stores were completely different in their merchandising and pricing, but the lines are so blurred anymore that the only true difference is the name above the doors. Grocery Outlet is probably going to have an impact. As for Rite Aid, there are many areas where they have stores close to Safeway and/or Albertsons, often in the same shopping centers. The consumer never wins when one company controls many names in one market. The companies get so big and bloated that they lose focus of things such as prices and service, not to mention local preferences...

[a42887]

However, at one point, the Albertsons and Safeway stores were two different companies. They technically have stolen some business simply by merging.

Sure, one could definitely say that. However, the merger happened; that is over and not at play here. The only thing at play is whether two separate buildings changes the market share. Whether they have one or two stores in this city was completely irrelevant to market share when they were the only player in town.

Things really don't change with a new entrant to the market either. Its unlikely that people's habits will change any differently whether they had one or two stores from the same company to choose from prior to the new store opening.

The one thing that would have caused concern is if a competitor had wanted the space Albertsons currently occupies now. However, they didn't; it sat vacant for a bit, so that is a moot point.

it seems like it would make sense to combine into whichever store is the better of the two from an operational standpoint

No doubt it does. I'm conflicted on that one. The Albertsons property seems to be newer and better maintained. Which begs the question why they divested it to begin with. My thought on the current situation, without that piece of historical knowledge, is that it would make sense to open the Albertsons and get it established so that they could close the much older, much worse condition Safeway. But, they could have done that before, right? Maybe, but maybe Haggen had certain criteria for their acquisitions during divesture, and the Albertsons property was the only property suitable, hence them being stuck with Safeway. We'll never know the truth to that one.

[pseudo3d]

The Safeway is next to the Rite Aid, but the Albertsons is in better shape, and the Safeway/Rite Aid could make for a 70,000 square foot store. The Safeway appears to have an outdoor area (garden center?) near the front, if that was reclaimed as well as a few areas the square footage could be bumped up slightly. If the Safeway/Rite Aid was closed for an extensive remodel that made it a single store (merchandise where both overlap could be eliminated), Albertsons could then serve as the main grocery and pharmacy for a while.

[klkla]

If the lease ends on one of the stores (let's say the older Safeway) and ABS chooses not to renew it, then they have no say in what can and can't be done,

That's not necesarily true. Retailers often put restrictions in their leases that prevent the company from renting to a new competitor even if they close the store when the lease expires. WalMart does this a lot. I can think of a couple locations in Las Vegas where Smith's has done the same thing. This was trend that started in the 90's.

[rwsandiego]

The Safeway is next to the Rite Aid, but the Albertsons is in better shape, and the Safeway/Rite Aid could make for a 70,000 square foot store. The Safeway appears to have an outdoor area (garden center?) near the front, if that was reclaimed as well as a few areas the square footage could be bumped up slightly. If the Safeway/Rite Aid was closed for an extensive remodel that made it a single store (merchandise where both overlap could be eliminated), Albertsons could then serve as the main grocery and pharmacy for a while.

In other words, the Jewel-Oscoization of Safebertsaid.