Haggen to "close or sell" some stores- 5 AZ, 16 CA, 1 WA, 5 OR

[rvt]

http://www.bellinghamherald.com/news/bu ... y%20Haggen

Took a while to find it...the text of the lawsuit

[mbz321]

I went back to my post. I posted it on April 28. Wow, so was I witnessing theft? Haggen may have a case.

Not necessarily. I'm sure Haggen didn't want or buy certain fixtures/merchandise in the new stores, so Albertsons/Vons took them out before Haggen moved in. Now if they took more out than they were supposed to, who knows?

[storewanderer]

Well the text of the lawsuit is on Haggen's website. http://media2.haggen.com.s3.amazonaws.c ... plaint.pdf

[storewanderer]

And this one: http://www.edhat.com/site/tidbit.cfm?nid=157904

[arizonaguy]

Well the text of the lawsuit is on Haggen's website. http://media2.haggen.com.s3.amazonaws.c ... plaint.pdf

The truth is, I don't necessarily disagree with a lot of Haggen's contentions.

Albertsons / Safeway have been running increased sales and promotions in the Phoenix area since around May or so (when Haggen entered the market). Part of it is the integration of Albertsons and Safeway together as one company (fixing Safeway's pricing problems in the market) but I'm sure part of it is also to drive out Haggen.

Plus, I remember posting when the list was put out that all 3 Safeway stores in Arizona sold to Haggen were total duds. Safeway only closed 2 Arizona stores during the first few months of the merger because I'm almost certain #s 3, 4, and 5 on the most under-preforming list were sold to Haggen (which has now closed all 3 of them).

Haggen deserves some of the responsibility in terms of the pricing problems. It was immediately obvious that they had a problem, and they've STILL to this day not fixed them completely.

For example, EVERY other mainstream chain in Phoenix (Albertsons, Bashas', Fry's, and Safeway) has Pepsi soda on sale this week 4 12-packs for $8.88. Haggen's has Pepsi 24 packs at $5.99 (for 4 days only)

[storewanderer]

The complaints Haggen raises are definitely with merit. I'm just not so sure the actions of Albertsons/Safeway as far as competitive activity goes (like better ads, and the dollars off coupons) were specifically in response to Haggen. I think those were more in response to Albertsons/Safeway being a merged entity, trying to drive sales into their stores from ALL competitors, etc.

Some of the other complaints, like overfilling fresh departments, etc. all sound like isolated issues with misguided mid management who made bad decisions or did not fully understand what the conversion process expectations were. The broken equipment and poor store conditions (complaints seem to be centered on Vons Stores which is no surprise) are all things Haggen should have addressed when they agreed to purchase those specific locations. I assume they inspected the locations before they agreed to purchase the locations...?

Plus Haggen says they had to spend their marketing budget to solve "inventory issues." Haggen shouldn't have been counting on Albertsons/Safeway for inventory in the first place. It is their store and they should have been bringing their own products in. They complain that perimeters had too much product and then complain center stores were understocked. When Ralphs took over Albertsons/Lucky Stores in NorCal back in 1999, the entire conversion process involved removing all of the old private label and perimeter items and bringing Ralphs stuff in for private label and for perimeter. Also installing new IT systems. And that is exactly what Haggen should have done. And those stores, toward their final days as Albertsons/Lucky, ran a little low on perimeter and ran a little low on private label center store because they knew all of those items would be pulled and replaced during the conversions.

Another thing is Haggen seems to say the fast conversion schedule caused them damage. They agreed to that schedule. They should have known that schedule was too fast and should not have agreed to it. If Safeway/Albertsons refused to sell them the stores over the scheduling disagreement, so be it.

Also Haggen complains that the Albertsons PM2 system was hard to use/hard to understand/did not give correct data. Haggen did not have to use this system. Haggen could have gotten their own systems in the stores instead. Also when Haggen retagged the stores they knew what every single Albertsons/Safeway price was because they had to remove the old price labels when they put theirs up. All it takes is a walk through an Albertsons/Safeway to see many items never sell at regular price and are always on sale at some price.

All of the comments about store conversion dates, etc. were also published by the media well in advance of when the conversions happened. I also remember mid-way through the conversion cycle, Haggen changed the conversion schedule. I am wondering if some of the stores that did not receive ads for a few weeks before conversion was due to those conversions being put off but the ad department not adjusting the ad cycles...

Things I find curious about Haggen is why has the Haggen Southwest Ad been a little 4 page thing, and the Haggen Northwest Ad been 8+ pages every week. I don't think this has anything to do with Albertsons.

I definitely think they were sold some garbage stores. The lawsuit seems to expose 21 "underperforming" stores included in the transaction. I'd venture a guess the majority of those were Safeways.

It will be really interesting to see how this turns out and how far this case goes. But I'm more into seeing good well run stores with healthy customer counts for a retailer to make money and stay in business. I still think a better move would be for Haggen to get some more management in place and get some better promotions going immediately, but it might be too late for that. I'm not sure if the current Haggen management is spread too thin or if there is some other issue but it is clearly not working what they are doing. But the #1 complaint people make about Haggen to this day is pricing and I don't feel they can blame Albertsons for that. Haggen has had very ample time to adjust prices. I think operations, supply chain, and marketing need 200% of Haggen's attention right now. Not a lawsuit.

[Super S]

But the #1 complaint people make about Haggen to this day is pricing and I don't feel they can blame Albertsons for that. Haggen has had very ample time to adjust prices. I think operations, supply chain, and marketing need 200% of Haggen's attention right now. Not a lawsuit.

A big strike against Haggen is the fact that they did not get a warehouse out of this deal. Without a warehouse of their own, it is hard to control operations and the supply chain when you have to rely on outside vendors. Not to mention things like outside services for delivery when not operating their own trucks. Arizona and Southern California is a long way from Northwest Washington.

Nearly every big chain, including WinCo, Kroger, Safeway/Albertsons, and Walmart, are able to control this stuff better by operating their own warehouses and having their own truck fleets.

Haggen simply does not have the buying power of the larger chains, and as a result, prices are too high.

[CalItalian]

http://www.thenewstribune.com/news/busi ... 24235.html Concerning a question about a California lawsuit from a former employee who claimed that Haggen was charging higher prices for items at the register than were listed for those items on the grocery aisles, Pleva responded, “Haggen was disappointed to learn about this lawsuit and is confident it has absolutely no merit.”

[storewanderer]

I am sure heads will be rolling.

[storewanderer]

Haggen files bankruptcy. Not that anyone is surprised.

http://www.oregonlive.com/window-shop/i ... uptcy.html