Supervalu Cuts Major Remodels in Half

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Super S
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Re: Supervalu Cuts Major Remodels in Half

Post by Super S »

I recently stopped at an Albertsons in Portland. I don't remember the exact address, but this had by far one of the worst remodels I have ever seen Albertsons do. It was a blue-gray, painted over, with some new signs on the walls. However, they painted right over the old mouldings and everything, and kept the floor tile pattern that was used in the blue-gray package. Overall it looked very tacky and kind of reminds me of how Kmart remodels their stores. Albertsons used to do pretty thorough remodels, even replacing the floor tiles most of the time.
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Re: Supervalu Cuts Major Remodels in Half

Post by storewanderer »

Was this a Supervalu remodel, or one done by old Albertsons?

Old Albertsons did a remodel like you describe here. It was kind of odd what happened. The store in question was technically the "longest unremodeled" unit in town; a 1992 build. In about 2003, they did a remodel. Right after they started to remodel the store, the Reno stores were transferred from Intermountain Division to Northern California Division. So this store got a new floor around produce, the first dry goods aisle, and bakery/deli, but the rest of it still has the old blue/gray floor pattern. Other than that they just painted over everything, kept all of the old refrigeration, etc. The small handfull of remodels they did in Northern California going forward were done in this manner (between 2004-2006).

Safeway did a fair number of remodels like this in the late 90s.
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Re: Supervalu Cuts Major Remodels in Half

Post by maynesg »

Hi, What can you expect. you replace cases only if they give you a return in new sales or in energy savings.lMost companies were willing to get these savings over the course of time.But this company has a lot of debt, is a wholesaler and hasn!t a clue how to be a retailer. They have just about destroyed Acme with their cost savings, short sidededness and plain old piss poor management of what was a fine chain.
hmanagement has preched customer service only to end that meeting with telling us to cut the payroll. They have programs that are desinged to fail, ignoring tie ins , past volume history and brand loyalty. They pay bonus mopney to their store Managers not on increase in store volume or profitability but on how much wages can be cut and how much can be saved on maintaining the store. Sales per man hour is ignored for clerk hire. A fine recipie for disaster
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Re: Supervalu Cuts Major Remodels in Half

Post by krogerclerk »

The current CEO came from Walmart and wants to emphasize price. The plan is to grow Save-a-Lot. Thus the new SuperValu wants to take on ALDI and Walmart on price. Incidentally Aldi and Trader Joes, through parent Albrecht, is a major shareholder of SVU, via the Albertson's merger. It could be argued that the growth from the Albertson's merger and the ensuing debt is the cause of the current problems at SVU. Jewel was the most profitable Albertson's division and grew its marketshare due to Safeway's mismanagement of Dominick's.

Acme is struggling and it's rumored that SVU has put the chain on the market, much as American Stores did throughout the 90's. ASC invested little in Acme in the 80's and 90's and Albertson's did put some much needed updating into the stores. Many of Acme's older units are similar in size to Save-a-Lot and could be converted at a low cost. But if Genuardi(Safeway), SuperFresh/Pathmark(A&P) are also struggling, Giant-MD/Stop-n-Shop retreated from Philly(New Jersey suburbs), Walmart Supercenters have not acheived critical mass in the region, Clemens Family Markets sold 6 of its 22 stores to A&P and 14 to Giant Food Stores-PA, who is the problem? The region or the operators? Giant-PA is growing its presence in the outer Pennsylvania suburbs, but Acme's mass is in Philadelphia and the older burbs of the Delaware River Valley including Camden, NJ and Wilmington, DE.

This would leave SVU with the Northwest and Upper Rocky Albertson's, Jewel, Shaw's/Star Markets, Cub in Minnesota, and Save-a-Lot as SVU's only viable properties. SoCal Albertson's and Acme are the problem operations, but which will go first and how long will it play out, SVU has a history of every 5 years or so analyzing its business model. It's possible that Albrecht's could increase its shares of SVU and merge Trader Joes and ALDI's into the fold or see a growth of Save-a-Lot as competition to ALDI and sell its SVU shares and take on SAL head on with ALDI.

The unfolding of American Stores and Albertson's was debt from growing too much too fast and SVU has taken on the problem with the Albertson's merger.
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Re: Supervalu Cuts Major Remodels in Half

Post by maynesg »

Hi, Your history is a little off. Acme was never a drain on American Stores Profitability. As a person whio was and still is a Department manager with Acme from that time period let me explain to you that Acme was by far the market leader in Philadelphia by far and extremly profitable untill the lunkheads from Albertsons came a long. Acme only renovated or opened a new store when it made econonic sense. They maintained their market share in Philadelphia by burying any new predator that dared to open a store in New Castle County with special pricing and promotions in stores that were involved.
Alberstsons came a long raised prices did bizzare things like renovating a store in Chestertown Md six miles from Rock Hall the capital of the Maryland Fishing fleet by Adding a `huge Butcher Block to Sell fish to people who earn their living catching Fish. I could state many other examples of such.
As for the assumptiont hat Acme still opperates many small stores that would make ideal Sav A Lots all I can say is they were closed long ago. The few that are still in operation are still open because they are extremly profitable due to great locations or cheap rent and would not make sense to close.
Super Valu hasn!t got the ability to compete in the Boston -New York -Phily market and should just sell to some one who can such as Kroger and stick to being a wholesaler, some thing that they have a clue about doing.
. As for the region it is a compact market with every town having two or three stores. The average consumer isn!t stupid and will not spend and extra twenty dollars per trip for the same order at Acme as she can get half a mile up the road. She wants a clean well stocked store with quality perishables and good customer service. Currently the lunkheads from Super Valu are not giving this to their customers. The shame of it is every person who works for Acme at store level knows it. The folks at the top aren!t listerning to the troops in the field,
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Re: Supervalu Cuts Major Remodels in Half

Post by krogerclerk »

No intention to offend, but American Stores did put Acme on the market on two occasions in the 90's, the most recent when Buttrey was spun off, but no buyers came forth wanting the chain. ASC cited that the chain was not performing well, but profitible. During the 90's, the chain retreated from surrounding Southeast Pennsylvania to focus on the core Philadelphia market in which Acme was and still the market leader. Albertson's did make some early mistakes, such as attempting to eliminate the Super Card, which they quickly reinstated, and eliminated brands, but did build several new stores on their grocery palace model. They quickly fixed some the of the mistakes, unlike Safeway did with Genuardi, who continues to alienate customers.

One of the problems that has been cited with controlling costs at Acme is the agreement which provides daycare benefits to employees with young children, a rare benefit in the supermarket industry. This is a great benefit to working parents no doubt and has enabled many single parents in particular to be able to work the hectic and crazy scheduling retail demands. I'm pretty certain this agreement is with all the chains represented by local 1776.
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Re: Supervalu Cuts Major Remodels in Half

Post by maynesg »

Hi, no offense taken. This said local 1776 reprsentsless then a third of the chains stores.Locals 56 1262, 27 North and 27 south represent the majority. Because 1776 is in the heart of the city it gets the big ink!
The rest of the loclas do not have a contract any where near as strange as that one. The contract on theEastern shore makes Walmart jobs look lucrative. Remember that these stores and not 1776 represent most of the volume and profits forthe company.
Yes American Stores didputAcme up for sale twice beforeand each timethe stock for the company soared, oldman Skags was clever.Just keep in mind at the timeof the sale to Albertsons, Acme was clearly the best run of any of ams units.
Remember the New York Market is the most competitive in the world ( Philidelphia isj ust an extension of it) Albertsons just opened pretty stores with high prices in amarket with Shop Rite It just didn!t cut it.
Super Valuis worse, they have made Acme nothing more then a largeindirect account chagingthe 6 percent upcharge just like any of their other wholesale clients. A deal with Kroger fell apart because SV would not sell; the warehouse with the stores and wanted a ten contract to supply them. Its a shame what they have done to this chain.If you don!t understand the market the get out and cut your loses
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Re: Supervalu Cuts Major Remodels in Half

Post by klkla »

Supervalu would only sell Albertson's SoCal or Acme to raise cash, certainly not because either division is chronically unprofitable. Both operations have great real estate and have been profitable in the recent past.

The problem with both operations has been mismanagement by SVU. But, both chains can be fixed somewhat easily by sharpening service and improving pricing. They had a five point market share advantage over Giant just two years ago that has dwindled down to just a little over a point now despite the fact Giant is operating the same number of stores in Philly. In LA/Orange County they've dropped from second place to fourth in a similar amount of time (those are 2008 numbers - it''s probably worse now).
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Re: Supervalu Cuts Major Remodels in Half

Post by krogerclerk »

SuperValu is selling its 18 store Connecticut division of Shaw's which has existed since 1995. Stop&Shop and Wakefern are picking up the most locations. Two locations remain unsold.
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Re: Supervalu Cuts Major Remodels in Half

Post by Alpha8472 »

It looks like Supervalu is trying to sell off its stores and divisions bit by bit.

Who knows what division will be next. Could it possibly be the underperforming Albertsons stores in Southern California?
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