Crucial times for Shoppers

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Re: Crucial times for Shoppers

Post by BatteryMill »

pseudo3d wrote: Once a company is bought by another company, unless it has a good chance in the market (or someone buys the name wholesale), it tends to be tied with the fate of the parent company. It would've been far more likely that, say, Randalls would've died under Safeway than ever found another steward. Their market shares combined aren't great, with less than 11% for Baltimore, taking third place (Safeway is second at 15%, and Giant is first at a whopping 32%). In DC (as of 2013), Shoppers takes third place with 9%. Despite Shoppers having innovated a number of supermarket features, the numbers don't justify it. SuperValu is going to take the way that will get it funds, and unfortunately in this economy that would mean liquidation. The only way Shoppers can survive sans SuperValu is if it goes independent with SuperValu as a supplier, which would prolong the life of Shoppers but independents have a horrible track record of shedding stores at a fast rate, plus it is unlikely to get any better and will continue to deteriorate.
Eh, you know... I've seen that a bit before, but the stores could go down before the parent. Must have been a bad decision for SuperValu Richfood Dart Drug to even have bought the company. Seems like the whole chain was just a "limited time thing", like Giant was without much of a succession plan (that was steady until Ahold's buyout). You could know that.

I'm still surprised at how Shoppers seems to have been in the top three as of late. Well, that is a few years old now, but that's even for the "new grocers" like Wegmans, Harris Teeter, and all the natural/organic food places. I guess it hasn't changed. Shoppers did innovate, but of course, as you know it, it's standard now (except for the warehouse-era knick-knacks). Well, I don't know... how about just sell off Shoppers to someone else. That's probably the final decision.

Speaking of which, let's just move on to something a little lighter. What do you say on a different Shoppers-related topic? :)
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Re: Crucial times for Shoppers

Post by pseudo3d »

After it was acquired by SuperValu, SuperValu converted some stores called Metro (owned by Richfood) to Shoppers in Baltimore. This appears to be the origin of the Baltimore Shoppers stores. I wonder what it was like.
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Re: Crucial times for Shoppers

Post by BatteryMill »

pseudo3d wrote:After it was acquired by SuperValu, SuperValu converted some stores called Metro (owned by Richfood) to Shoppers in Baltimore. This appears to be the origin of the Baltimore Shoppers stores. I wonder what it was like.
Yes, those stores. Of course, they were corporate siblings at first, but then Shoppers expanded their reach when they rebranded them all in 2003.

My Flickr buddies know a little more about these stores as they were, but I still do know a lot. Metro stemmed from an older line of grocers in the nearby area, such as Food-A-Rama and even Basics, another deep-discount store. This site explains most of the past of those stores. http://fdrama.com/ Metro, more or less, was a bit more luxurious (on the level of Harris Teeter today) and if I can recall from what I heard, had a good selection of prepared foods. Now, with Shoppers, I've seen that the reason Shoppers went a little upscale was because of this conversion, to keep customers on the same boat, even if non-warehouse stores were opened earlier on. However, these stores have seemed to deteoriate in condition, as of their age, their layout, their locations, and general Shoppers uncleanliness. Those stores just seem to have wide open spaces, poor ceiling tiles, weird design quirks, and more.
Baltimore still seems more viable and safer for Shoppers, so they can invest in these stores well, maybe test the good old warehouse market and expand that. That's an excellent plan for them.
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Re: Crucial times for Shoppers

Post by pseudo3d »

To be honest with you, if I were in charge of Albertsons, I would do a reverse merger with SuperValu for a pittance, allowing them to take their company public without an IPO and the risks associated with that, then sell off practically everything related to SuperValu. Cub Foods (the non-franchised locations) can go to Hy-Vee, giving them the market without the hazards of building new stores (plus, Cub Foods employees can keep their jobs). Their wholesale business (and associated warehouses) can go to C&S or whoever else wants them. Save-a-Lot will still be spun off but it won't be retained (maybe some DCs for them too). Hornbacher's can be sold to an independent, Shop 'n Save in St. Louis will be sold off (except for the Springfield IL stores--those become Jewel-Osco), and Farm Fresh goes to Publix.

As for Shoppers, they will be converted to Safeway systems and be converted to Safeway stores later. It wouldn't be the best ending for Shoppers, but a "quiet conversion to another brand" is better than "liquidated to best buyers" or "dying a slow death until the last store closes".
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Re: Crucial times for Shoppers

Post by storewanderer »

How about the debt that would come with that reverse merger? What would that bring the total debt to? I think a reverse merger is not the answer as it would get their debt up even more (though you point out the idea of selling things off- proceeds could be used to pay down debt).

The debt is probably actually the biggest immediate factor that is causing the company to continue to lose money.

Sure operations have problems too but that is a little of a messy topic that involves so many issues we could write books on it. The debt and cost to service it is pretty straightforward and if that cost was wiped out... bet it would be quite profitable.
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Re: Crucial times for Shoppers

Post by pseudo3d »

storewanderer wrote:How about the debt that would come with that reverse merger? What would that bring the total debt to? I think a reverse merger is not the answer as it would get their debt up even more (though you point out the idea of selling things off- proceeds could be used to pay down debt).

The debt is probably actually the biggest immediate factor that is causing the company to continue to lose money.

Sure operations have problems too but that is a little of a messy topic that involves so many issues we could write books on it. The debt and cost to service it is pretty straightforward and if that cost was wiped out... bet it would be quite profitable.
I feel that Safeway was worth far less than Albertsons paid for it (even though its assets were considerably larger by magnitudes than what SuperValu's are currently), Safeway had advantages that integrated well into the Albertsons system (plants, new stores, systems, brands, etc.), though they were worthless in terms of assets they could get from them. Compared to SuperValu, which also has some brands and systems that could be integrated, but they also have more "value" off of them that can be harvested. If Cub Foods and Farm Fresh were divested in the same way the "Florida 49" were, then that could net Albertsons $2B between the two of them, enough to cover at least the sales price, not to mention other assets like independent stores and . Wild Harvest could be re-introduced to stores and drive up sales with promotions. Albertsons wouldn't have to pay SuperValu $6.25 million every quarter for TSA wind-down services. The biggest problem is if they aren't able to sell those assets due to economic or whatever other reason (as far as I know, the excess DCs in California remain unsold), then they're screwed.

The other big problem is that SuperValu overpaid for Albertsons ($6B + another $6B assumed in debt) then sold it back (minus the already-sold Bristol Farms, a bunch of stores they closed, and the store brands) for far less ($100M + $3.2B in debt)...

As for writing a book on Albertsons, I'm surprised someone hasn't done it already. The fact that they're still around and kicking for an almost Kmart-level number of screwups is frankly amazing.
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Re: Crucial times for Shoppers

Post by wnetmacman »

pseudo3d wrote:The fact that they're still around and kicking for an almost Kmart-level number of screwups is frankly amazing.
You have to keep in mind that Supervalu is the old Albertsons. The New Albertsons is owned by Cerberus, and while the stores and ideas are the same, the folks running them are not. Kmart-style screwups have been going on for all of their existence; 50+ years. They can do just enough correctly to survive. Supervalu's issues with Shoppers, Cub and their others names are taking a major toll on their bottom line.

I suspect that if SVU is able to divest Save A Lot, their fortunes will drastically change. That could be why they are dragging their feet on the deal. I don't think they wanted to sell old Albertsons to New Albertsons; they just couldn't run it any more without the company dragging some good, storied names further into the ground, and the price was right.
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Re: Crucial times for Shoppers

Post by pseudo3d »

wnetmacman wrote:
pseudo3d wrote:The fact that they're still around and kicking for an almost Kmart-level number of screwups is frankly amazing.
You have to keep in mind that Supervalu is the old Albertsons. The New Albertsons is owned by Cerberus, and while the stores and ideas are the same, the folks running them are not. Kmart-style screwups have been going on for all of their existence; 50+ years. They can do just enough correctly to survive. Supervalu's issues with Shoppers, Cub and their others names are taking a major toll on their bottom line.

I suspect that if SVU is able to divest Save A Lot, their fortunes will drastically change. That could be why they are dragging their feet on the deal. I don't think they wanted to sell old Albertsons to New Albertsons; they just couldn't run it any more without the company dragging some good, storied names further into the ground, and the price was right.
SuperValu did own Cub Foods, Shoppers, and others prior to Albertsons (during the NAI days, they also owned bigg's, a hypermarket with similar floorplans to Meijer but never was able to reach critical mass). I remember reading something about how they were never able to integrate their other brands fully with Albertsons (none of them had PF&H) due to some weird financial thing when they purchased it.

And if we wanted to be pedantic, the "Old Albertsons" is actually Albertsons LLC. The way that the split happened was that Albertsons formed a holding company called New Aloha Corporation, NAC became New Albertsons Inc., Albertsons Inc. ("Old Albertsons") became a subsidiary of NAI, Albertsons Inc. was reorganized as Albertsons LLC, most of the assets and debt went to NAI (except for the 600-odd stores in the "lesser divisions" and Super Saver), CVS bought the drug division out of LLC, LLC is sold off to AB Acquisition (the Cerberus group), and NAI was sold to SuperValu.

I'm sure Albertsons would love to have Wild Harvest, Equaline, and the others again but I have a feeling that SuperValu probably has a "you can pry them out of my cold dead hands" attitude toward them (a wholesale company's gotta have store brands after all).

If SuperValu sells or spins off Save-a-Lot, they could net a lot out of it, but then they'd be left with a wholesale business and a bunch of stores fighting a losing battle. Since it seems like SuperValu has a clear reluctance to part with Save-a-Lot, why not go the opposite direction, sell off everything but SAL? If it was SuperValu selling off Cub and Farm Fresh for multi millions of dollars (not to mention Shoppers, which can be divided up), then it would save SuperValu, finance an expansion of SAL (which they stated is a goal of theirs), and everyone goes home happy.
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Re: Crucial times for Shoppers

Post by pseudo3d »

One of the more recent articles I read talks about Gross (the CEO) and how he wants to make SuperValu back into a great wholesale company again, and I'm not sure if that plan includes their dwindling retail holdings. They mentioned how good the Marsh account was, and they are moving forward on spinning off SAL. I don't know what SVU wants to do with their retail holdings. I read Kroger might be interested in Cub Foods, but I'm not sure SuperValu would sell (partly they would be getting less out of it than what they want/Kroger would be willing to pay, partly because that would mean losing an account).
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Re: Crucial times for Shoppers

Post by BatteryMill »

pseudo3d wrote:To be honest with you, if I were in charge of Albertsons, I would do a reverse merger with SuperValu for a pittance, allowing them to take their company public without an IPO and the risks associated with that, then sell off practically everything related to SuperValu. Cub Foods (the non-franchised locations) can go to Hy-Vee, giving them the market without the hazards of building new stores (plus, Cub Foods employees can keep their jobs). Their wholesale business (and associated warehouses) can go to C&S or whoever else wants them. Save-a-Lot will still be spun off but it won't be retained (maybe some DCs for them too). Hornbacher's can be sold to an independent, Shop 'n Save in St. Louis will be sold off (except for the Springfield IL stores--those become Jewel-Osco), and Farm Fresh goes to Publix.

As for Shoppers, they will be converted to Safeway systems and be converted to Safeway stores later. It wouldn't be the best ending for Shoppers, but a "quiet conversion to another brand" is better than "liquidated to best buyers" or "dying a slow death until the last store closes".
Okay, is this just the Albertsons perspective? I would like that if Shoppers became the absolute warehouse grocer it was intended to or if it extended over, say, Acme. They can really grow in the less competitive rural areas, even if they are a little out of place. Safeway just has so many locations near existing Shoppers.
wnetmacman wrote: As for writing a book on Albertsons, I'm surprised someone hasn't done it already. The fact that they're still around and kicking for an almost Kmart-level number of screwups is frankly amazing.
Hmm... maybe there's hope for Kmart. Albertsons' thing is a little too detailed and historic, however it seems.
pseudo3d wrote: You have to keep in mind that Supervalu is the old Albertsons. The New Albertsons is owned by Cerberus, and while the stores and ideas are the same, the folks running them are not. Kmart-style screwups have been going on for all of their existence; 50+ years. They can do just enough correctly to survive. Supervalu's issues with Shoppers, Cub and their others names are taking a major toll on their bottom line.

I suspect that if SVU is able to divest Save A Lot, their fortunes will drastically change. That could be why they are dragging their feet on the deal. I don't think they wanted to sell old Albertsons to New Albertsons; they just couldn't run it any more without the company dragging some good, storied names further into the ground, and the price was right.
SuperValu did own Cub Foods, Shoppers, and others prior to Albertsons (during the NAI days, they also owned bigg's, a hypermarket with similar floorplans to Meijer but never was able to reach critical mass). I remember reading something about how they were never able to integrate their other brands fully with Albertsons (none of them had PF&H) due to some weird financial thing when they purchased it.

And if we wanted to be pedantic, the "Old Albertsons" is actually Albertsons LLC. The way that the split happened was that Albertsons formed a holding company called New Aloha Corporation, NAC became New Albertsons Inc., Albertsons Inc. ("Old Albertsons") became a subsidiary of NAI, Albertsons Inc. was reorganized as Albertsons LLC, most of the assets and debt went to NAI (except for the 600-odd stores in the "lesser divisions" and Super Saver), CVS bought the drug division out of LLC, LLC is sold off to AB Acquisition (the Cerberus group), and NAI was sold to SuperValu.

I'm sure Albertsons would love to have Wild Harvest, Equaline, and the others again but I have a feeling that SuperValu probably has a "you can pry them out of my cold dead hands" attitude toward them (a wholesale company's gotta have store brands after all).

If SuperValu sells or spins off Save-a-Lot, they could net a lot out of it, but then they'd be left with a wholesale business and a bunch of stores fighting a losing battle. Since it seems like SuperValu has a clear reluctance to part with Save-a-Lot, why not go the opposite direction, sell off everything but SAL? If it was SuperValu selling off Cub and Farm Fresh for multi millions of dollars (not to mention Shoppers, which can be divided up), then it would save SuperValu, finance an expansion of SAL (which they stated is a goal of theirs), and everyone goes home happy.[/quote]

Well, that's confusing. Everything looks like Albertsons to me. And I do see why they should sell the others instead. Hmm.
pseudo3d wrote:One of the more recent articles I read talks about Gross (the CEO) and how he wants to make SuperValu back into a great wholesale company again, and I'm not sure if that plan includes their dwindling retail holdings. They mentioned how good the Marsh account was, and they are moving forward on spinning off SAL. I don't know what SVU wants to do with their retail holdings. I read Kroger might be interested in Cub Foods, but I'm not sure SuperValu would sell (partly they would be getting less out of it than what they want/Kroger would be willing to pay, partly because that would mean losing an account).
Those SVU stores weren't made to last... that's just bad. They really drove those stores into the ground this time... and that's not enough for the new competition.
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