pseudo3d wrote:arizonaguy wrote:storewanderer wrote:United has been left on its own due to the sale agreement. Albertsons had to let United stay this way for a certain number of years. Kroger had a similar agreement with Jay C back when they bought it. Couldn't touch much for 10 years. That's passed now. These types of things get thrown in when you buy private companies.
Safeway's brands are very centralized; this is the company that made Lucerne dairy items and trucked some like yogurt back to Chicago to sell. They sell largely the same items everywhere and their line of items isn't very extensive. Safeway doesn't even have a private label baking soda and is missing hundreds of private label drug items that Supervalu offered and previously that the old Albertsons offered. The private label program used by the old Albertsons and by Supervalu varied by division in its mix, how the stores merchandised it, and its pricing. The Safeway brand roll out there is centralized, same items to every division and zero regional tinkering.
The Kroger private label program varies by division in a major way. It is very inconsistent on mix. The basic items are there in all locations but the odd items are not. You won't find Kroger cold brew tea bags in the west but you'll find them in the south. You won't find Kroger honey buns in the west either but you'll find those in the south too. You won't find much Private Selection or Simple Truth in a F4L but you'll find a lot of the generic owl brand. For some reason you won't find Private Selection frozen waffles at Smiths but you'll find them at Fry's. And I don't know why Kroger all natural crunchy peanut butter is sold at Fred Meyer but not at Smiths.
At Safeway none of what I described above happens. Same items everywhere, coast to coast. Albertsons is following that path now by implementation of Safeway private label. The only thing that causes any allowed deviation is store size and corporate controls what items get cut, not the division.
You don't see articles about HT being special or kept special because, frankly, it isn't special. You don't see many articles of people talking about changes Kroger is making there either because they have not made many... It is profitable and they are letting it be for now.
One of the articles that Pseudo mentioned actually discussed rolling out Harris Teeter ideas to the rest of the chain.
However, almost every article I read indicates Mariano's is special. I also think it's worth noting that many of the top Roundy's executives used to work for Dominick's and were responsible for selling Dominick's to Safeway. Mr. Mariano himself spent over 25 years at Dominick's. He seems to care a lot about his concept and while Safeway decimated Dominick's, I'm not sure Mariano wants his second chain to undergo the same fate.
Yes, I'm sure Mariano's will be more Krogerized in 5 years than it is today, but I don't think it'll be destroyed.
As I mentioned in my lengthy post, Kroger tends to run each and every store a little differently from one another versus Albertsons and Safeway, which are very much more "one size fits all" in approach.
I think I need to back up. Let's observe the real facts:
1) We all have our own biases on whether we like/don't like Albertsons or Kroger, which influences our decisions and our POV. I don't like Kroger, and for the longest time I thought that Albertsons was a more expensive version of Kroger, which was not a compliment toward Kroger.
2) Divisions of both stores have variable quality, I think we've cleared that. Most of my dislike of Kroger is focused on the Southwest (Texas) division (though, as of August 1, was dividing into Houston and Dallas), though that's not the only thing about it.
3) Consumers react harshly to takeovers and the initial response is universally negative. Albertsons, Safeway, and others (A&P) have had their share of this (and usually deservedly so) but Kroger is no exception.
4) Whether Albertsons lets divisions like United ultimately stay or get absorbed down the line is speculation. Whether Kroger lets divisions like Mariano's ultimately stay or get absorbed down the line is speculation.
5) Comparison isn't a good deal because we have so little to go on for Albertsons, a company patched together from the remains of the "poor divisions" of Albertsons Inc., SuperValu's Albertsons/ASC brands, Safeway (which has been a poster child on how
not to run acquired chains), and United, therefore we can't rush to judgement much.
I'll agree with this.
I' guess my opinion on the matter is that I think Kroger is a far better managed chain and has done a better job with its most recent mergers and acquisitions.
All is not perfect there. Kroger couldn't make Northern California work in the 1980s when it bought Fry's and couldn't make it work in the late 1990s/2000s with Ralph's / Cala / Bell.
Speaking of Ralph's, the Ralph's division ncluding Food4Less seems to be operating more like the recent histories of Albertsons and Safeway versus other Kroger divisions (where they have been stagnant with more store closings versus openings). This may be more of a situation where Southern California is just a very difficult market to have any success in (Haggen failed there spectacularly in a very short time) or it may not be (Stater Bros. seems to be the healthiest traditional chain there and seems to be growing).
Kroger also has some pristine stores and some nasty stores in the same division. There are some downright disgusting Fry's stores in the Phoenix area as well as some stores that are on maybe only a slight step below a Mariano's, Market Street, or Central Market.
Overall they seem to be growing and have focused on targeted acquisitions of a well run chain (Harris Teeter) as well as a "fixer upper" with a lot of potential (Roundy's).
This is in contrast to Albertsons which went on a rapid expansion binge in the 1990s that ended in 2002 quite spectacularly. The company limped along until 2006 and then split up. The 2 parties that bought its supermarkets: Albertsons LLC and Supervalu continued to suffer from many of the same problems that plagued the chain before it was split up. Albertsons LLC shed 70% of the stores it acquired and Supervalu shed 22% of the stores it acquired. Then the 2 chains merged and the reunited company has gone since gone on an acquisition spree not unlike the original Albertsons of the 1990s - early 2000s. First, they bought United Family. Then, they bought Safeway. Finally, they bought 70+ A&P stores.
Let's analyze their assets:
Albertsons LLC (and the stores acquired from Supervalu) are the rotting carcass of Albertsons Inc. They haven't built new stores in 10 years while steadily closing stores. The only growth that they have had has been acquiring stores from other dying chains (Dominick's in Chicago and A&P in PA/NJ). The chain has really done nothing innovative, in fact it removed self-checkouts and eliminated shopper's cards. It's store base is in dire need of capital and almost all renovations over the past 10 years have been done on the cheap.
Safeway is a supermarket chain that has been limping along for the past 30 years. Like Albertsons between 2002 - 2006, Safeway had been expanding at a rapid clip until the late 1980s when they sold off / closed most of their assets in the central US and Southern California/Nevada. The company started to turn around its core operations in the 1990s and then went on a buying spree to re-enter Southern California/Nevada and Texas. It also tried to enter Chicago and Philadelphia by buying grocers there. We all know the rest of this story. Safeway failed spectacularly in Chicago and Philadelphia, sold its profitable Canadian division, and was rumored to be about to pull the plug on its Texas operations when it sold itself to Cerberus/Albertsons. Unliked Albertsons, Safeway actually has, for the most part, a store base in decent condition. Safeway kept its stores clean and well maintained, and most of its stores had been renovated in the 2000s.
United was a well run family chain that is probably the brightest star in the Albertsons universe. It has a modern store base and seems to compete very well with its completion. For the most part, it has been untouched by its parent.
Really, the brightest spots in the combined entity are: Chicago, the Intermountain West, Northern California, Philadelphia / New Jersey, and West Texas.
Up until Monday, Kroger had a token presence in Chicago with Food4Less; had failed twice in Northern California with only a token presence via FoodsCo, and doesn't operate any stores in Philadelphia / New Jersey or West Texas.
I am rooting for Albertsons / Safeway. They just don't have a great track record against strong competition and overlap with Kroger everywhere except for Hawaii, New England, New Jersey/Philadelphia, and West Texas. In all of the overlapping markets, Kroger is the stronger operator except for Chicago, Idaho / Intermountain West, and Northern California.