El Rancho Supermercado Sold

[architect]

Recently, it was reported that Garland-based El Rancho Supermercado has been sold to Heritage Grocers Group,a California-based company which owns several other Hispanic-oriented chains.

News Article

Additionally, a recent writeup on Houston Historic Retail indicates that Albertsons' private label products are being clearanced out, replaced with AWG and C&S products.

Houston Historic Retail Link

Could this be Albertsons' first step in addressing store overlap and required divestitures if the Kroger-Albertsons merger goes through?

[rwsandiego]

Recently, it was reported that Garland-based El Rancho Supermercado has been sold to Heritage Grocers Group,a California-based company which owns several other Hispanic-oriented chains.

News Article

Additionally, a recent writeup on Houston Historic Retail indicates that Albertsons' private label products are being clearanced out, replaced with AWG and C&S products.

Houston Historic Retail Link

Could this be Albertsons' first step in addressing store overlap and required divestitures if the Kroger-Albertsons merger goes through?

EDIT:
Maybe I am mis-reading, but I don't see how El Rancho replacing Albertsons' private label products addresses store overlap. Or are you saying Albertsons selling its stake in El Rancho addresses store overlap?

I'm exhausted and had a momentary brain lapse. I get it - Albertsons is owned by Apollo and they are selling "their" interest to another affiliate of Apollo.

[storewanderer]

My guess is Kroger did not want partial non-controlling ownership in this asset, so different ownership was found for it. Cardena's isn't great and hasn't gotten better with time so I am not sure what these stores are like at the present time but I'm not sure this is a good change in ownership for them. This asset was never integrated into Albertsons except getting some private label items from them at some stores (and still selling AWG brands 100% at other stores). From an IT perspective it was kept separate for some reason.

Waiting to see if something similar happens with United. Similar thing going on there- it gets Albertsons private labels but that is it. It isn't on the Safeway loyalty program or IT.

[arizonaguy]

I noticed that this Heritage Grocers owns Cardenas as well as Tony's Fresh Market.

If Heritage is in an acquisition spree I'm curious if we could see them making a play for some Mariano's locations as well as some Food4Less locations (as Mariano's / Tony's looks to be the best fit as does Food4Less /Cardenas).

It also would be interesting to see if any Fry's stores could be sold to Los Altos Ranch Market.

[ClownLoach]

Recently, it was reported that Garland-based El Rancho Supermercado has been sold to Heritage Grocers Group,a California-based company which owns several other Hispanic-oriented chains.

News Article

Additionally, a recent writeup on Houston Historic Retail indicates that Albertsons' private label products are being clearanced out, replaced with AWG and C&S products.

Houston Historic Retail Link

Could this be Albertsons' first step in addressing store overlap and required divestitures if the Kroger-Albertsons merger goes through?

EDIT:


I'm exhausted and had a momentary brain lapse. I get it - Albertsons is owned by Apollo and they are selling "their" interest to another affiliate of Apollo.

DING DING DING!

Apollo bought a good chunk of Albertsons and then we started hearing about this "strategic alternatives" discussion to "maximize shareholders value." There was no tangible interest in an Albertsons merger until they got their hands on it. And Apollo does own this group that bought El Rancho.

Apollo is probably working to figure out their "Plan B" assuming the Kroger merger fails.

I'm starting to think that they're going to keep building up this little group of Hispanic grocers, possibly go after one of the Asian operators as well like Zion or 99 Ranch. Then when the Kroger deal falls through I wonder if Apollo swoops in to push for the ACI breakup and buys the profitable divisions then merges this specialty ethnic group into it. Albertsons has done the best job of maintaining "mainstream" stores in very diverse markets - and they might think there is some money in potentially converting some to one of these other formats if they feel they'll get more volume. It's obvious that in some areas Albertsons and Kroger sit on buildings that would be more productive with an ethnic format. Easy to change banners and merchandise if you own them all. That would be a different, but successful, way to "maximize shareholders value."

[storewanderer]

DING DING DING!

Apollo bought a good chunk of Albertsons and then we started hearing about this "strategic alternatives" discussion to "maximize shareholders value." There was no tangible interest in an Albertsons merger until they got their hands on it. And Apollo does own this group that bought El Rancho.

Apollo is probably working to figure out their "Plan B" assuming the Kroger merger fails.

I'm starting to think that they're going to keep building up this little group of Hispanic grocers, possibly go after one of the Asian operators as well like Zion or 99 Ranch. Then when the Kroger deal falls through I wonder if Apollo swoops in to push for the ACI breakup and buys the profitable divisions then merges this specialty ethnic group into it. Albertsons has done the best job of maintaining "mainstream" stores in very diverse markets - and they might think there is some money in potentially converting some to one of these other formats if they feel they'll get more volume. It's obvious that in some areas Albertsons and Kroger sit on buildings that would be more productive with an ethnic format. Easy to change banners and merchandise if you own them all. That would be a different, but successful, way to "maximize shareholders value."

Apollo sure dressed Sprouts up well when they controlled it compared to what is going on at Sprouts today. They drove volume and made people love Sprouts during those pre-IPO years. Sure, Sprouts financials look good today. So did Albertsons financials in 2000. Same old game was going on at Albertsons back then. Supposedly hundreds of new stores were going to be opening every year. Jack up prices, run lousy promotions, not care that you are losing customer counts and just say you focus on more profitable customers, etc. Some things never change.

So maybe Apollo will try to dress up a group of ethnic stores in the same manner. I do think the playbook Apollo followed with Sprouts could work with ethnic grocers, possibly. However I also think the Hispanic and Asian format shoppers may be a bit more wise to some of the types of tricks these private equity firms play, which may make it a little more difficult. Sprouts especially under Apollo catered to what I call the flake shopper- there is a segment of customers in a given market who shop at the "new thing" where it "feels good" and the problem is the place that is "new" "feels good" keeps changing since new competitors keep opening, so there is no long term customer loyalty with that customer. I don't even know what customer Sprouts caters to now but whoever they are they are bringing Sprouts high margins.

[pseudo3d]

Recently, it was reported that Garland-based El Rancho Supermercado has been sold to Heritage Grocers Group,a California-based company which owns several other Hispanic-oriented chains.

News Article

Additionally, a recent writeup on Houston Historic Retail indicates that Albertsons' private label products are being clearanced out, replaced with AWG and C&S products.

Houston Historic Retail Link

Could this be Albertsons' first step in addressing store overlap and required divestitures if the Kroger-Albertsons merger goes through?

EDIT:


I'm exhausted and had a momentary brain lapse. I get it - Albertsons is owned by Apollo and they are selling "their" interest to another affiliate of Apollo.

DING DING DING!

Apollo bought a good chunk of Albertsons and then we started hearing about this "strategic alternatives" discussion to "maximize shareholders value." There was no tangible interest in an Albertsons merger until they got their hands on it. And Apollo does own this group that bought El Rancho.

Apollo is probably working to figure out their "Plan B" assuming the Kroger merger fails.

I'm starting to think that they're going to keep building up this little group of Hispanic grocers, possibly go after one of the Asian operators as well like Zion or 99 Ranch. Then when the Kroger deal falls through I wonder if Apollo swoops in to push for the ACI breakup and buys the profitable divisions then merges this specialty ethnic group into it. Albertsons has done the best job of maintaining "mainstream" stores in very diverse markets - and they might think there is some money in potentially converting some to one of these other formats if they feel they'll get more volume. It's obvious that in some areas Albertsons and Kroger sit on buildings that would be more productive with an ethnic format. Easy to change banners and merchandise if you own them all. That would be a different, but successful, way to "maximize shareholders value."

Circa 2018, there were a few Randalls that effectively converted to El Rancho. I believe there were about three stores. I don't know if they were sub-leased or what.

As asinine as the idea of divesting El Rancho Supermercado for legal reasons is, Apollo's interest in both Tony's Fresh Market via Cardenas and Jewel-Osco via their share in Albertsons seems to be unnoticed.

[ClownLoach]

DING DING DING!

Apollo bought a good chunk of Albertsons and then we started hearing about this "strategic alternatives" discussion to "maximize shareholders value." There was no tangible interest in an Albertsons merger until they got their hands on it. And Apollo does own this group that bought El Rancho.

Apollo is probably working to figure out their "Plan B" assuming the Kroger merger fails.

I'm starting to think that they're going to keep building up this little group of Hispanic grocers, possibly go after one of the Asian operators as well like Zion or 99 Ranch. Then when the Kroger deal falls through I wonder if Apollo swoops in to push for the ACI breakup and buys the profitable divisions then merges this specialty ethnic group into it. Albertsons has done the best job of maintaining "mainstream" stores in very diverse markets - and they might think there is some money in potentially converting some to one of these other formats if they feel they'll get more volume. It's obvious that in some areas Albertsons and Kroger sit on buildings that would be more productive with an ethnic format. Easy to change banners and merchandise if you own them all. That would be a different, but successful, way to "maximize shareholders value."

Apollo sure dressed Sprouts up well when they controlled it compared to what is going on at Sprouts today. They drove volume and made people love Sprouts during those pre-IPO years. Sure, Sprouts financials look good today. So did Albertsons financials in 2000. Same old game was going on at Albertsons back then. Supposedly hundreds of new stores were going to be opening every year. Jack up prices, run lousy promotions, not care that you are losing customer counts and just say you focus on more profitable customers, etc. Some things never change.

So maybe Apollo will try to dress up a group of ethnic stores in the same manner. I do think the playbook Apollo followed with Sprouts could work with ethnic grocers, possibly. However I also think the Hispanic and Asian format shoppers may be a bit more wise to some of the types of tricks these private equity firms play, which may make it a little more difficult. Sprouts especially under Apollo catered to what I call the flake shopper- there is a segment of customers in a given market who shop at the "new thing" where it "feels good" and the problem is the place that is "new" "feels good" keeps changing since new competitors keep opening, so there is no long term customer loyalty with that customer. I don't even know what customer Sprouts caters to now but whoever they are they are bringing Sprouts high margins.

Apollo did seem to drive good volume and store openings at Sprouts. They made good money turning it around. Unfortunately new management is systematically destroying their good work there.

Not everything they touch turns to gold though. Michaels is really struggling under their ownership, they've eliminated positions and are moving towards self checkout only. In stocks are horrible and the stores have lost their "edge" - they always were on top of trends before their competitors like Joann and Hobby Lobby, and their store standards were always better. Now they are messy and appear to be like a Big Lots craft store operation.

Cardenas feels like a store under the pressure of private equity to slash expenses. Nice looking stores that were clearly built with a "spare no expense" model but now are understaffed or self checkout. They're losing business left and right with lines at their in store restaurants and delis. They've got tortilla making machines sitting idle and bags of tortillas from a central commissary with tons of preservatives.

I'm glad I got to stay at the Venetian Resort in Las Vegas before Apollo took over. I shudder to think of how they'll cost cut that into a glorified Motel 6.

[storewanderer]

Apollo did seem to drive good volume and store openings at Sprouts. They made good money turning it around. Unfortunately new management is systematically destroying their good work there.

Not everything they touch turns to gold though. Michaels is really struggling under their ownership, they've eliminated positions and are moving towards self checkout only. In stocks are horrible and the stores have lost their "edge" - they always were on top of trends before their competitors like Joann and Hobby Lobby, and their store standards were always better. Now they are messy and appear to be like a Big Lots craft store operation.

Cardenas feels like a store under the pressure of private equity to slash expenses. Nice looking stores that were clearly built with a "spare no expense" model but now are understaffed or self checkout. They're losing business left and right with lines at their in store restaurants and delis. They've got tortilla making machines sitting idle and bags of tortillas from a central commissary with tons of preservatives.

I'm glad I got to stay at the Venetian Resort in Las Vegas before Apollo took over. I shudder to think of how they'll cost cut that into a glorified Motel 6.

I don't see synergy between Cardena's and Tony's either. First there is the geography issue. But then there is also the format issue. Tony's was a semi upscale type of format with a heavy emphasis on fresh departments. They may have had a couple of stores that saw a lot of hispanic shoppers due to the location but they were not really even close to being a hispanic chain.

Cardena's was always uneven. Back when the family owned it the stores closer to Los Angeles were completely different from the stores in Fresno due to different management, they had different ads, different perimeter mix, different pricing, even different POS systems. They were basically not even like the same chain. Then the Las Vegas/Arizona units were different still (former Pro's Ranch units before Pro unfortunately got into trouble, which was a shame, because Pro's Ranch was wonderful, and at one point those AZ/NV units were a joint venture between Cardena's and Northgate).

When Cardena's was expanded into NorCal via Mi Pueblo that was a complete junk purchase of stores that opened with a huge bang but quickly became real shoddy operations, awful pricing, poor service, thick security, dirty parking lots, and prices higher than a Safeway. I have no idea how Mi Pueblo survived and rapidly expanded as it did for a while, then again they did go bankrupt so maybe I just answered my own question. From what I've seen of Cardena's in NorCal they continue to run things similar to how Mi Pueblo always did.

Now this Tony's thing may be a candidate to pick up Albertsons/Kroger divests and maybe that is their idea. I won't go further down the speculation path on that front.

[rwsandiego]

Apollo did seem to drive good volume and store openings at Sprouts. They made good money turning it around. Unfortunately new management is systematically destroying their good work there.

Not everything they touch turns to gold though. Michaels is really struggling under their ownership, they've eliminated positions and are moving towards self checkout only. In stocks are horrible and the stores have lost their "edge" - they always were on top of trends before their competitors like Joann and Hobby Lobby, and their store standards were always better. Now they are messy and appear to be like a Big Lots craft store operation.

Cardenas feels like a store under the pressure of private equity to slash expenses. Nice looking stores that were clearly built with a "spare no expense" model but now are understaffed or self checkout. They're losing business left and right with lines at their in store restaurants and delis. They've got tortilla making machines sitting idle and bags of tortillas from a central commissary with tons of preservatives.

I'm glad I got to stay at the Venetian Resort in Las Vegas before Apollo took over. I shudder to think of how they'll cost cut that into a glorified Motel 6.

I don't see synergy between Cardena's and Tony's either. First there is the geography issue. But then there is also the format issue. Tony's was a semi upscale type of format with a heavy emphasis on fresh departments. They may have had a couple of stores that saw a lot of hispanic shoppers due to the location but they were not really even close to being a hispanic chain.

Cardena's was always uneven. Back when the family owned it the stores closer to Los Angeles were completely different from the stores in Fresno due to different management, they had different ads, different perimeter mix, different pricing, even different POS systems. They were basically not even like the same chain. Then the Las Vegas/Arizona units were different still (former Pro's Ranch units before Pro unfortunately got into trouble, which was a shame, because Pro's Ranch was wonderful, and at one point those AZ/NV units were a joint venture between Cardena's and Northgate).

When Cardena's was expanded into NorCal via Mi Pueblo that was a complete junk purchase of stores that opened with a huge bang but quickly became real shoddy operations, awful pricing, poor service, thick security, dirty parking lots, and prices higher than a Safeway. I have no idea how Mi Pueblo survived and rapidly expanded as it did for a while, then again they did go bankrupt so maybe I just answered my own question. From what I've seen of Cardena's in NorCal they continue to run things similar to how Mi Pueblo always did.

Now this Tony's thing may be a candidate to pick up Albertsons/Kroger divests and maybe that is their idea. I won't go further down the speculation path on that front.

You are right. I never considered them to be a Hispanic grocery store when I shopped there while living in Chicago. Funny thing is, the chain was founded by two Italian immigrants and was first located in a neighborhood that, at the time, was heavily Mexican. They have since branched out into mainstream suburban locations. From their website:

Tony’s Fresh Market (“Tony’s”) is a family-owned and operated grocery chain in the Chicagoland area. Tony’s was founded in 1979 by Tony Ingraffia and Domenico Gambino, two Italian immigrants with big dreams and an unprecedented work ethic.
The original location on Fullerton Avenue and Central Park, which still exists today, was opened with only five employees: one produce employee, two meat employees, one cashier, and Tony running around the store like a man on a mission. For that first decade in business, Tony and Domenico typically worked 12 hours a day, seven days a week just to try and make a few bucks at the end of the year.
Fast forward to now, the Tony’s Fresh Market family has grown exponentially: We now have 21 locations, over 400 vendors, and thousands of customers that we serve on a daily basis. As a company, we are confident that if we provide high-quality products at affordable prices, and top-notch customer service, the Tony’s Fresh Market family will continue to grow for years to come.

They do have experience operating castoffs. More than a few of their stores were Dominick's locations and one was an A&P lo so many years ago.