Integration of Albertsons and Safeway

This is the place for general and miscellaneous posts on topics which might extend past the boundaries of any specific region. No non-grocery posts.
rwsandiego
Store Manager
Store Manager
Posts: 1345
Joined: April 3rd, 2016, 10:57 pm
Has thanked: 59 times
Been thanked: 74 times
Status: Offline

Re: Integration of Albertsons and Safeway

Post by rwsandiego »

storewanderer wrote:...10 years ago I would have said Safeway has a much better deli program than Kroger. The problem is Safeway has stayed the same and Kroger has made a lot of upgrades (Boar's Head, greatly expanded cheese, addition of baked seasoned and bbq seasoned chicken by the piece, addition of cold chinese food, etc.).
Very interesting that you mentioned that because in San Diego the VONS deli, in my opinion, was never as strong as Ralphs. One thing I find about Ralphs is they tend to be hyperlocal in their offerings. The downtown SD store has less variety in lunchmeat and cheese, but better prepared foods and sandwiches. The prepared foods require heating, though. Hillcrest (a Fresh Fare) and Mission Valley have excellent lunchmeat and cheese selections and both offer made-in-the-store sushi. Fewer options in sandwiches and prepared foods, though. Sports Arena Blvd has an average deli, which seems to be tailored to the neighborhood.

Since the Albertsons acquisition, the VONS deli has greatly improved. I hope it stays that way.
storewanderer
Posts: 16545
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 5 times
Been thanked: 466 times
Contact:
Status: Offline

Re: Integration of Albertsons and Safeway

Post by storewanderer »

The operator in NorCal who should have Boar's Head is Raleys, but they can't seem to work with Boar's Head. Boar's Head seems to work a little strange; they seem to expand slowly a store here and a store there. I think Raleys wanted a program to go from 0 to 100 at all stores overnight and it was not happening. In Nevada where Smiths and Scolaris already have Boar's Head I am not sure it would be added to another conventional; there are other assorted stores, a small chain and independent here and there, in NorCal who have Boar's Head and they may not add to a conventional near those either.

Save Mart has recently reset its delis and added an extensive mix of Kretchmar lunchmeats. These are selling at Boar's Head like prices (over $10/lb) and are not the same quality. Albertsons NorCal used to offer those items and over time Save Mart quit carrying them due to slow sales. It will be interesting to see how committed they are to this program or how much shrink they can handle.

The stores that Albertsons has added Dietz and Watson to in various places have realized a drastic improvement to their deli vs. what was there before (whether it was a Safeway deli or a Supervalu deli).

Meanwhile more photos from a NorCal Store this afternoon: this is not a store I've photoed before and the conditions here were a little better than the stores I photoed the past week but still unacceptable in my opinion. This is a medium volume store and it was not busy today at all (15 or so other shoppers). Produce had no staffing; bakery and deli both had one employee each; three checkouts open. An interesting thing about this particular location is on the receipt where it typically references Safeway.com or the toll free national number for comments, at this store, the store manager's name was on the bottom of the receipt and there was a phone number down there that appeared to be a cell phone (not the same phone number as the store number which is elsewhere on the receipt). Also as I posted earlier about how consistent their deli offering is across locations, I noticed a variance at this store, this store had tater tots in its hot case instead of potato wedges.
Image
Image
Image
rwsandiego
Store Manager
Store Manager
Posts: 1345
Joined: April 3rd, 2016, 10:57 pm
Has thanked: 59 times
Been thanked: 74 times
Status: Offline

Re: Integration of Albertsons and Safeway

Post by rwsandiego »

storewanderer wrote:...
Image
Image
Image
That store looks awful. The bagged salad section at my local VONS, which is a pretty small store, will resemble the last pic - at 10:00 PM. We eat a lot of salad in my neighborhood and there is limited space to display product. Still, the following day the display is fully stocked.

All of this deli talk reminded me of a very tiny VONS in Del Mar Heights. VERY wealthy community, but the VONS did not have a fresh deli. At all. When it became a Lifestyle store it received a deli.
veteran+
Valued Contributor
Valued Contributor
Posts: 2617
Joined: January 3rd, 2015, 7:53 am
Has thanked: 1934 times
Been thanked: 106 times
Status: Offline

Re: Integration of Albertsons and Safeway

Post by veteran+ »

pseudo3d wrote:
veteran+ wrote:
Makes sense and also interesting.

I do not know if the buyers at Safeway or Albertsons/Safeway are the same buyers that were present when I was there but even if some are still there your observations hold true.

Safeway buyers were famous for holding grudges against distributors or manufacturers. Someone had a huge disagreement with Boars Head and Red Bull when I worked there and as a result (despite constant customer complaints) Safeway decided to punish them and refused to carry the product.

Safeway buyers always had the attitude that they did not need anyone and if someone rubbed them the wrong way they would suffer the consequences (even if customers wanted the product). Perhaps this attitude affects their tendency to not adjust as quickly as Kroger?
Keep in mind a lot of the California buyers were sent packing in favor of (at least planned to be) local buyers. Either way, the whole of the Safeway/Albertsons programs tend to be behind because of the Albertsons split-up and Lifestyle, which Kroger has continued steadily on in the last past decade.

Okay, but my point was that Safeway (pre-merger) was usually behind in product trends (except O Organics which they mastered better than Kroger) because of a personality thing with their top brass and their buyers (both of whom had negative reputations). So Safeway is already behind and then you have all this other stuff. I am hoping that Alberstons did not retain any of those negative personalities from Safeway.
storewanderer
Posts: 16545
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 5 times
Been thanked: 466 times
Contact:
Status: Offline

Re: Integration of Albertsons and Safeway

Post by storewanderer »

The harder question is flash back to 2000: Which chain seemed to be in a better spot on product trends, Safeway or Albertsons?

Back then, in my view, Safeway was beating Albertsons in every market and I felt they had a far better quality/mix than Albertsons on both perimeter and private label. They also had significantly lower prices than Albertsons. There was a reason why Albertsons built all those really nice stores in the mid-late 1990's throughout the middle and southern US and failed with them. A nice facility with the wrong products at the wrong price is what doomed them.
rwsandiego
Store Manager
Store Manager
Posts: 1345
Joined: April 3rd, 2016, 10:57 pm
Has thanked: 59 times
Been thanked: 74 times
Status: Offline

Re: Integration of Albertsons and Safeway

Post by rwsandiego »

storewanderer wrote:The harder question is flash back to 2000: Which chain seemed to be in a better spot on product trends, Safeway or Albertsons?

Back then, in my view, Safeway was beating Albertsons in every market and I felt they had a far better quality/mix than Albertsons on both perimeter and private label. They also had significantly lower prices than Albertsons. There was a reason why Albertsons built all those really nice stores in the mid-late 1990's throughout the middle and southern US and failed with them. A nice facility with the wrong products at the wrong price is what doomed them.
I agree with you except in the Chicago market. Albertson's pretty much left Jewel alone. Jewel was still offering President's Choice products, even after the Alberston's acquisition, and still used the Jewel name on private-label products. Safeway replaced everything that made Dominick's special with standard Safeway fare. However, in Southern California (and I am guessing everywhere else) Safeway's (VONS) offering was superior to Albertson's.
pseudo3d
Posts: 4077
Joined: November 12th, 2015, 7:01 pm
Has thanked: 11 times
Been thanked: 102 times
Status: Online

Re: Integration of Albertsons and Safeway

Post by pseudo3d »

storewanderer wrote:The harder question is flash back to 2000: Which chain seemed to be in a better spot on product trends, Safeway or Albertsons?

Back then, in my view, Safeway was beating Albertsons in every market and I felt they had a far better quality/mix than Albertsons on both perimeter and private label. They also had significantly lower prices than Albertsons. There was a reason why Albertsons built all those really nice stores in the mid-late 1990's throughout the middle and southern US and failed with them. A nice facility with the wrong products at the wrong price is what doomed them.
From most things I've read, Albertsons was quite competitive until sometime around the American Stores acquisition. Even before ASC and the push into Houston, their locations were often in the wrong place at the wrong time*. Albertsons also pioneered gas stations near stores, first in 1997. Safeway didn't start until 1999, and that was only after buying Randalls, which had them.

Albertsons, for all of its problems, seemed to be at least trying to do stuff when it was buying American Stores, like adding coffee shops, Kosher delis, or (faring less well) lawn and garden centers, contrasting with Safeway that was trying to buy stores in markets and gutting them to make them act like Safeway stores while doing nothing really innovative to the company, leading to Lifestyle around 2005, which was innovative but didn't help the company's fortunes in the long run.

* One that comes to mind was a store that lasted from 1993 to 1995 in Waco, Texas. The store was near a major intersection with several other stores including a Winn-Dixie and a Wal-Mart, but it was farther off that intersection off of a less-traveled loop road and without a large population base to support it. The other store, a former Skaggs Albertsons/Skaggs Alpha Beta, fared far better, closing in 2006, though its smaller size and less-prominent location never allowed it to become a grocery store again.
storewanderer
Posts: 16545
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 5 times
Been thanked: 466 times
Contact:
Status: Offline

Re: Integration of Albertsons and Safeway

Post by storewanderer »

Albertsons in the mid and late 1990's did all the things the analysts told them to do like you describe with the coffee shops, etc. The analysts don't understand the business. Customers will say one thing in a focus group to analysts but their actual behavior in the store is completely different. Albertsons in the mid to late 1990's ran with a lot of large stores, prices too high, poor promotions, and the result of all that along with the awful botch of Lucky in CA was the market exits you saw starting in 2002. Here in Nevada back in the mid and late 1990's, Albertsons was usually $1 more than Safeway for typical staple items like milk, bread, etc. and their ad prices were across the board all higher. Albertsons promotion program was lousy, it did not properly hit all departments or categories and the stores had fake specials where they would do something like say 12 pack soda $7.99 and sale price $4.99 when the competitor was $4.49 regular price on the same item. More of the former American Stores stuff remains open today than the original Albertsons stuff especially their organic expansion attempts into the middle of the US. Albertsons culture in the mid and late 1990's put profit above all else; the departments and stores were completely obsessed with hitting their gross profit figures; customer satisfaction, product freshness, and sales were not the primary goals (this was a big reason why Lucky was such a clash; Lucky was a sales-driven operation). This is why back in the 1990's you had Albertsons stores that smelled like fish or smelled like old fried chicken grease back then; stores cutting corners trying to hit their gross. On paper the company may have looked good in the mid and late 1990's but there were numerous warning signs of problems. This was the mess they brought that GE guy in to fix; to try and change the culture. We all see how that went...

In the mid and late 1990's, Safeway was doing quite a few opportunistic expansions from what I saw, replacing a lot of smaller and older stores with new stores. In many cases these were in locations that were generally not real easy to develop so there were few risks of new competition opening nearby (unlike Albertsons who was busy building in the middle US where it was very easy and cheap for competition to come nearby). The "Superior Service" program was in place and the stores were heavily monitored and from what I saw did a really good job executing the service program back then. The other thing Safeway did back in the mid and late 1990's was a hard push on its private labels, specifically items they made in their plants, both on price and on in-store sampling. This was well received in the Safeway Stores but that strategy proved a disaster in the midwest and east acquisitions. Safeway as a result was getting better margins and better private label turns back then than any of its competition. Safeway back then was also showing better same store sales gains than any of its competitors. During that time Safeway was also aggressively expanding specialty departments in its stores (including pharmacy) into locations where they previously did not offer them. Safeway also ran far better perimeters than Albertsons in quality, mix, and price, especially produce and bakery. All of these things are why, even to this day, in the west coast markets where Albertsons and Safeway compete, Safeway is stronger. Safeway laid the foundation in the late 1990's, made its stores higher sales per square foot by far, and reinforced it with lifestyle in 2005 and Albertsons just kept on fumbling along under various ownerships that never had a consistent go to market message or consistent customer experience.

Where it fell apart for Safeway was with the acquisitions of Dominicks, Genuardis, and Randalls/Tom Thumb for reasons all of us here know. The lifestyle program was a band aid and the company started having major price problems back in 2001-2002, using what I call the old Albertsons method of the mid to late 1990's of increasing prices to unrealistic levels to keep showing profit numbers and mask the fact that they were losing customer count and losing marketshare. Safeway did just fine with its acquisitions of Vons and I guess Carrs (though many of the Carrs have closed... I have never heard anyone from Alaska say anything bad about Safeway's handling of Carrs; maybe too few people up there to care).
veteran+
Valued Contributor
Valued Contributor
Posts: 2617
Joined: January 3rd, 2015, 7:53 am
Has thanked: 1934 times
Been thanked: 106 times
Status: Offline

Re: Integration of Albertsons and Safeway

Post by veteran+ »

storewanderer wrote:The harder question is flash back to 2000: Which chain seemed to be in a better spot on product trends, Safeway or Albertsons?

Back then, in my view, Safeway was beating Albertsons in every market and I felt they had a far better quality/mix than Albertsons on both perimeter and private label. They also had significantly lower prices than Albertsons. There was a reason why Albertsons built all those really nice stores in the mid-late 1990's throughout the middle and southern US and failed with them. A nice facility with the wrong products at the wrong price is what doomed them.

I agree with most of your missive but not about product variety.

IMO, Albertsons beat everyone on variety.

My recent experience in California leads me to surmise this. Albertsons carried so many different sizes, flavors, versions, etc. of products while Ralphs and Vons/Pavilions would have 2 sizes and 3 flavors. Of course Albertsons prices were substantially higher than Ralphs and noticeably higher than Vons/Pavilions.
veteran+
Valued Contributor
Valued Contributor
Posts: 2617
Joined: January 3rd, 2015, 7:53 am
Has thanked: 1934 times
Been thanked: 106 times
Status: Offline

Re: Integration of Albertsons and Safeway

Post by veteran+ »

Storewanderer............

"Albertsons in the mid and late 1990's did all the things the analysts told them to do like you describe with the coffee shops, etc. The analysts don't understand the business. Customers will say one thing in a focus group to analysts but their actual behavior in the store is completely different."

I cannot express to you how your above comment is 100% spot on!!!!!!

The money that is spent on these quasi-pseudo whatever scientific surveys by these "analysts" regarding customers is gigantic. Currently the big money budgets are now spent on millennial consumer research. LOL

You are correct, customers do not always do what they say.

Fresh & Easy was a great example (even though the research method was faulty from the get go). When research replaces common sense things like quality, cleanliness, training, service, consistency, execution, design efficiency, location, etc. then you have failure.
Post Reply