Albertsons / Safeway to Divest 168 stores

[klkla]

It'll be interesting to see if Haggen resurrects the TOP Foods name. But you're right, I'm not sure how Haggen stores will fit into a lot of these areas. Not to mention the prominent "Northwest Fresh" tagline won't work down this way.

In an article I read their CEO was quoted as calling the OR & WA stores their Pacific Northwest division and the CA, AZ & NV stores their Pacific Southwest division. Maybe Haggen "Southwest Fresh"?

Personally I think they're going to struggle. It's very difficult to introduce a new brand in this industry (recent examples would be Fresh & Easy or Raley's attempt to enter the Las Vegas and Albuquerque markets). They're not going to have enough stores in anyone major market except San Diego to have any kind of meaningful impact and if I was a betting man I would say that they will last for about five years.

And this is probably the precise reason Albertson's sold to them. They're hoping long term that they have eliminated a competitor by selling to a company that is very likely to fail.

[reymann]

walmart and stater bros has to be licking their chops for when haggen fails. this could lead to a big expansion for walmart neighborhood market in the next few years.

[klkla]

Stater Bros was already licking their chops and had financing in place to buy a lot of the stores and was passed over in favor of Haggen. Gelson's was also ready to buy a few of the stores and I'm sure Kroger wanted to get more stores in San Diego and the Central Coast.

This deal still has to be approved by the FTC and any of the State Attorney Generals can put up a fuss if they want to. At this point I don't expect them to oppose this deal but stranger things have happened.

[Brian Lutz]

Quite frankly, even in the Northwest the "Northwest Fresh" concept doesn't really work. The way they branded the departments comes across more along the lines of "Bellingham Fresh" than anything. I still think Haggen can do some really nice stores, but something tells me that they're going to have a lot of existing dysfunction to deal with in these acquired stores before they can do much to improve them.

[CalItalian]

The one location they should do well in is Santa Monica. It should be their #1 store based on the local resident population that will love their concept. A former Lucky, the store has little competition in the area. Just a Whole Foods Market in a one-time Safeway space at Rose & Lincoln and a Vons in another former Safeway space on Broadway & Lincoln (although that location was totally rebuilt a few years after the 1994 earthquake that severely damaged the Safeway). Ralphs has a store a little further south in Venice on Lincoln Blvd. (former Boys Market) plus there is a Smart & Final in a former Hughes store on Lincoln just south of Rose on Lincoln.

If I was to pick one location they will totally fail in, that would San Ysidro. Be better to sell to a Mexican market operator. It's actually a (Albertsons owned) Lucky Supermarket and accepts both dollars and pesos.

[Super S]

walmart and stater bros has to be licking their chops for when haggen fails. this could lead to a big expansion for walmart neighborhood market in the next few years.

Walmart has already taken over a couple of the recently closed Haggen locations in the Portland area.

[storewanderer]

I hate to call failure before they even open the doors but as I said before using Unified as primary supplier, which based on what I see at other stores with Unified as primary supplier, results in outrageous prices, and poor looking perimeters (unless the chains have their own programs and get all that stuff from sources other than Unified), I cannot see how this works nor will it be like the real Haggen Stores up in WA.

If Haggen was using Unified for dry grocery/drug I'd say well okay not the best scenario but it isn't the end of their chances. Even if they just ran a small warehouse operation to handle produce, meat, bakery, and deli on their own I'd say they have a fighting chance because they do an excellent job on these departments...

Others like Superior, Cardenas, Northgate, they order away from Unified on perimeter and have a growing number of their own private label items as well. These are much smaller chains than Haggen Southwest will be. There is just no excuse for this arrangement. Why didn't Vons/Safeway sell Haggen a warehouse too?

I think the poster who commented that Albertsons/Safeway has sold to Haggen knowing they are likely to fail has nailed it... the FTC should take a hard look at this deal. At least if it was structured with a warehouse so Haggen could self supply... that would really help their costs and let them get control over their perimeters and overall mix and have their own private label in their stores.

[Super S]

Another thought: Do any of the Safeways being acquired have fuel centers? Albertsons spun theirs off a couple years back, but Safeway still owns theirs, at least for now. I don't think Haggen has ever operated them, and it seems like the fuel centers, if any are involved, could end up being sold to somebody else unless Haggen plans to get into the fuel business also.

[BillyGr]

Another thought: Do any of the Safeways being acquired have fuel centers? Albertsons spun theirs off a couple years back, but Safeway still owns theirs, at least for now. I don't think Haggen has ever operated them, and it seems like the fuel centers, if any are involved, could end up being sold to somebody else unless Haggen plans to get into the fuel business also.

Or perhaps they could just lease them to independent operators?

[storewanderer]

I found some with fuel sold to Haggen assuming the fuel stations are included in the sale (some Safeway fuel stations are considered a separate store with a separate store number and separate manager but none of these locations appear to have that arrangement):

175 N. Fairview Goleta, CA
7601 Evergreen Everett, WA
4831 Point Foesdik Gig Harbor, WA
31565 State Route 20 Oak Harbor, WA
3355 Bethel SE Port Orchard, WA
4300 NE 4th Renton, WA

Subleasing the fuel operations to independent operators would probably be very easy to do if necessary.

Here is another article on Haggen. They will continue to use Supervalu Systems. They will also be converting the Safeway Stores to Supervalu Systems. The Arizona Albertsons will also need a conversion as those are not on Supervalu systems. But later in the article it says Haggen's current systems can support more than the current 18 stores.

I think a better approach for them would be to convert the OR/WA stuff to the Haggen systems in the first place. I kind of understand staying on the Supervalu systems in the sense of "too much too fast" though but Haggen needs to take ownership of these stores. Others, such as Save Mart, who have bought Albertsons Stores and tried to run them like an Albertsons, have not fared well. Stater, however, who took the stores and "made them their own" has done well. Bring something new to the table.

http://supermarketnews.com/retail-finan ... ast-rollup