Maybe I'm an optimist, but I wouldn't look too deep into the whole "buying more stores" deal. In 2016, what did they buy? They bought Haggen, which they won because none of the other bidders were "qualified" (or some such), they bought Paul's (only four stores, I get the impression the owner retired), and one store from Ahold/Delhaize. [EDIT: United bought some stores, but they're a bit different--operations and staffing there are far better than the rest of the company] The one store was probably all that could be realistically done. Most of the overlap wasn't in existing territory, and the ones that were were Food Lion stores also in ACME territory (probably not a good choice). Could they have boosted Shaw's/Star Market numbers? Maybe. Maybe it IS ready to be sold off.storewanderer wrote:I get the impression they were looking for a quick deal on the IPO and now it has not been so quick. ABS spent the first half of this year buying what felt like almost every store it could get its hands on, will that trend continue going forward? I was surprised they only got one store out of the Ahold/Delhaize transaction. I will also be surprised if they do not come forward as a buyer of Rite Aid/Walgreens Stores that are pending divest.klkla wrote:Yes but ABS has been trying to float an IPO almost immediately since they bought Safeway.
They can try to grow all they want but when you look online at what customers are saying about the stores it is not so good.
It would be interesting to see what division(s) they may sell if they opt to do that. That would sort of kill the whole growth story though. Or would it? Sell off assets deemed non core to invest in the business, consider other strategic acquisitions, buy back shares (doesn't apply at this point since they have not IPOed) and pay down debt? Yikes, that sounds a lot like what Safeway said when it sold Canada off...
And while comparisons to circa 2013 Safeway are troubling, Safeway had been struggling for years, because unlike Albertsons, which tended to more or less integrate ASC stores into their fold, Safeway's acquisitions were nothing less than a disaster. The other big difference between Safeway's Canada divestment and anything Albertsons may be considering is that it was a massive sale. If Albertsons put Shaw's up for sale tomorrow, all that would be going is a 130 store chain, its HQ, and two distribution centers. They could spin it as a marginally profitable, non-strategic asset. Comparatively, Safeway sold their Canadian operations, which included over 200 stores (all but 14 of them with pharmacies), 62 gas stations, 10 adjacent liquor stores, 4 distribution centers (and a "related wholesale business", according to a news article I found regarding the sale), and 12 manufacturing facilities. That's not a "strategic divestment", that's either a sign of desperation or a prelude to a massive reorganization. If Safeway had introduced an exciting new store prototype, lower prices, or significantly improved operations, then that might've really helped them out...and it turned out to be desperation, as within a year, Dominick's was history, and it was engaged to Albertsons.
Albertsons IS doing asset sales technically. In June, it sold both of the old Vons DCs (well, they kept part of one, apparently) for $250M, chances are it will be the Lucerne facilities before any division sales. They already closed two bakeries (those have disappeared from the list) and I can imagine more will come.