Albertsons buys Kings

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storewanderer
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Re: Albertsons buys Kings

Post by storewanderer »

pseudo3d wrote: October 17th, 2020, 1:22 am Maybe if Kings isn't really as nice as Albertsons would like it be, maybe the solution really is to take Kings downscale and replace ACME in North Jersey/NY entirely. It should be noted that the Kings logo has changed from the light green logo with the whisk to something a bit more pedestrian-looking (in blue, looking vaguely like it should be pronounced as "K'ngs").

They have their own loyalty program, "myKingsExtra", which is uncharacteristic for an upscale store.
This chain obviously had some pretty major problems to end up bankrupt with small older established stores in this dense of a location. Given Albertsons took over bankrupt A&P Stores in this same geography (which we know were very poorly run stores) and has not been very successful with those stores under Acme, it looks like they will now have two problem operations in this same geography.

It will be interesting to see what direction they take with these King's Stores. It appears they need to do something to get more customers through the door, and the first instincts on how to do that (hot promotions) may downscale the stores. Given Acme is loyalty card free (though pushes the Just For You program to some extent), maybe the same will happen here. The person Albertsons has running Acme is excellent, so we will see what direction they go with this.

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Re: Albertsons buys Kings

Post by klkla »

storewanderer wrote: October 17th, 2020, 11:12 am This chain obviously had some pretty major problems to end up bankrupt with small older established stores in this dense of a location.
I think their main problem was debt. If any company knows how to operate with a lot of debt it's Albertsons.

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Re: Albertsons buys Kings

Post by pseudo3d »

storewanderer wrote: October 17th, 2020, 11:12 am
pseudo3d wrote: October 17th, 2020, 1:22 am Maybe if Kings isn't really as nice as Albertsons would like it be, maybe the solution really is to take Kings downscale and replace ACME in North Jersey/NY entirely. It should be noted that the Kings logo has changed from the light green logo with the whisk to something a bit more pedestrian-looking (in blue, looking vaguely like it should be pronounced as "K'ngs").

They have their own loyalty program, "myKingsExtra", which is uncharacteristic for an upscale store.
This chain obviously had some pretty major problems to end up bankrupt with small older established stores in this dense of a location. Given Albertsons took over bankrupt A&P Stores in this same geography (which we know were very poorly run stores) and has not been very successful with those stores under Acme, it looks like they will now have two problem operations in this same geography.

It will be interesting to see what direction they take with these King's Stores. It appears they need to do something to get more customers through the door, and the first instincts on how to do that (hot promotions) may downscale the stores. Given Acme is loyalty card free (though pushes the Just For You program to some extent), maybe the same will happen here. The person Albertsons has running Acme is excellent, so we will see what direction they go with this.
I'd say that at this point Kings is damaged goods (paying almost $100M is too much but I digress...) and downscaling the brand (not individual stores, and some stores should keep the perks like the cooking school) with the North Jersey ACME stores becoming more Kings-like may be the best strategy. The Balducci's name is probably also far gone at this point.

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Re: Albertsons buys Kings

Post by pseudo3d »

I have yet to see an official list for the stores closing/remaining open. Kings' 25 stores will go down to 19, and it definitely looks like those six unsold stores will close after all, for instance, they insisted that the Maplewood store would stay open despite being excluded from the sale, until the store closure was announced a few weeks later. The other three stores that were mentioned to close were Warren, Bernardsville, and Gillette, so it's those four plus two more.

The Balducci's situation is even murkier. The Balducci's stores include 7 stores (Reston closed shortly after the bankruptcy) and two "grab and go" locations in airports that are about half the size of a 7-Eleven (if that) that serve baked goods, prepackaged salads, and other ready-to-eat goods. However, the announcement including 27 stores from Balducci's/Kings, which implies that 8 Balducci's stores will be saved, including at least one "grab and go" location, unless there are only four Kings that were sold, with the other two stores being the Balducci's locations in the airport.

This will make the actual sale even more interesting, in Alexandria, there's a Balducci's about five blocks from a Safeway, which will put the question if Balducci's is the "upscale" complement to Safeway and if it might expand in the DC market. But there are only two others in the entire DC area. In Greenwich, the Balducci's there is half a mile from the Riverside ACME. The reviews for Balducci's, like Kings, are surprisingly bad for "upscale" stores.

The Alexandria store is larger than the Safeway (which is only 12k square foot and looks like it might've even been an ACME in the distant past with its pitched roof) but Safeway has a parking lot whereas Balducci's is underground.

Honestly, the whole thing confuses me even more. The stores are mostly more expensive than upscale, and they don't seem to be getting into new markets. The only way I can see how this could work is using the Kings name to replace ACME in the North Jersey/NYC area, and using Balducci's as leverage to sell later. All of the Balducci's stores are very small, the Scarsdale store is less than 10,000 square feet (for instance)...but if they own most of their stores (the airport stores obviously excluded, of course) that's incentive to keep them and get the brand name for a bonus.

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Re: Albertsons buys Kings

Post by buckguy »

The Bethesda Balducci's is probably about 30K sf. It was Sutton Place Gourmet (an upscale local chain that Balducci bought--this store was much larger than the now closed original Sutton Place in DC on New Mexico Ave NW). I'm guessing Alexandria was like the one in DC in terms of size. I think this originally was a Grand Union, which built relatively large stores in the DC area (30k sf when that would have been bigger than the typical Safeway or Giant). Haven't been there in awhile, but when I did, the Bethesda store did a very good business even at odd times like mid-afternoon. It also was popular with people who worked in nearby office buildings for lunch. The fresh food offerings were a bit expensive, but they had a very wide assortment and the quality was a step up from other stores. The Giant across the street is a busy but fairly ordinary store that has been remodeled in the recent past; it's rather small compared with their new builds.

Gristedes would have made no sense for Albertson/Acme. Operating in Manhattan is complicated and expensive. A&P once had quite a few stores, but closed many of them and converted the remainder to Food Emporium and then pared down the number of those. Other traditional chains left Manhattan ages ago.

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Re: Albertsons buys Kings

Post by pseudo3d »

buckguy wrote: November 18th, 2020, 4:36 pm The Bethesda Balducci's is probably about 30K sf. It was Sutton Place Gourmet (an upscale local chain that Balducci bought--this store was much larger than the now closed original Sutton Place in DC on New Mexico Ave NW). I'm guessing Alexandria was like the one in DC in terms of size. I think this originally was a Grand Union, which built relatively large stores in the DC area (30k sf when that would have been bigger than the typical Safeway or Giant). Haven't been there in awhile, but when I did, the Bethesda store did a very good business even at odd times like mid-afternoon. It also was popular with people who worked in nearby office buildings for lunch. The fresh food offerings were a bit expensive, but they had a very wide assortment and the quality was a step up from other stores. The Giant across the street is a busy but fairly ordinary store that has been remodeled in the recent past; it's rather small compared with their new builds.

Gristedes would have made no sense for Albertson/Acme. Operating in Manhattan is complicated and expensive. A&P once had quite a few stores, but closed many of them and converted the remainder to Food Emporium and then pared down the number of those. Other traditional chains left Manhattan ages ago.
I'd thought about if Albertsons bought Gristedes, but Gristedes would've required a significant amount of work (moreso than Kings/Balducci's), the chain is already damaged itself (closed its larger, non-NYC stores years ago), NYC has really gotten worse since COVID-19 and everything that followed, and John Catsimatidis seems quite content to own the chain. Kings seems in good enough to displace the ACME name in that area, which I suspect may have been a motivation for Albertsons to buy into the chain.

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Re: Albertsons buys Kings

Post by buckguy »

John Catsimatidis has a reputation as an all around "piece of work"---among other things, a rather vulgar would-be socialite and a peripheral figure in Trump's orbit, a lot of ego and a difficult quirky boss. No one would want the chain unless he was completely out of the picture, but finding someone who can deal with the unique circumstances of operating in NYC would be difficult.

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Re: Albertsons buys Kings

Post by storewanderer »

buckguy wrote: November 19th, 2020, 4:39 am John Catsimatidis has a reputation as an all around "piece of work"---among other things, a rather vulgar would-be socialite and a peripheral figure in Trump's orbit, a lot of ego and a difficult quirky boss. No one would want the chain unless he was completely out of the picture, but finding someone who can deal with the unique circumstances of operating in NYC would be difficult.
Catsimatidis also runs a string of convenience stores outside NYC and is looking to build a paper bag manufacturing plant in response to the paper bag shortage due to the plastic bag ban imposed in NY. Hopefully he can get that plant built soon; paper bags that are Made in China are now being used at some CA Stores due to the current paper bag shortage. Good job there guys, ban the plastic bags, replace with reusable bags or now even paper bags Made in China, just hurting more American jobs there. So with that said I would not expect Catsimatidis is interested in selling his stores. But good to see he is trying to support his operation and promote jobs in his state by looking at putting up a paper bag plant.

With that said I don't think the NYC Gristdes stores are really chain material. They look very small, small shelves, very high prices, no/limited fresh departments, and probably just not a good fit for a larger chain. However unlike King's, it appears Catsimatidis runs a profitable operation that did not end up in bankruptcy. I am guessing these stores run with very tight expense controls (as tight as you can get in a place as high cost to operate as NYC).

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Re: Albertsons buys Kings

Post by veteran+ »

buckguy wrote: November 19th, 2020, 4:39 am John Catsimatidis has a reputation as an all around "piece of work"---among other things, a rather vulgar would-be socialite and a peripheral figure in Trump's orbit, a lot of ego and a difficult quirky boss. No one would want the chain unless he was completely out of the picture, but finding someone who can deal with the unique circumstances of operating in NYC would be difficult.
You were being very kind by saying "piece of work".

;-)

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Re: Albertsons buys Kings

Post by buckguy »

With multiple vaccines on the horizon, the paper bag plant doesn't sound like a great long-term investment.

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