Save Mart new corporate name

[pseudo3d]

The thing is that when SaveMart bought Albertsons NorCal, they were not buying a successful chain. Albertsons sold the NorCal division because it was struggling and just didn't make sense to pour money into. Safeway and Raley's have a history of both being pretty good operators and they to this day dominate the NorCal market. When SaveMart bought Albertsons NorCal, they were certainly making a gamble not only as a whole but on a store by store basis. Some of the Albertsons stores just didn't make sense either do to poor location or demographics that just wouldn't support a conventional store. Yet, SaveMart took on these stores and tried to make them work. A good amount of them have worked, and SaveMart has been able to keep them afloat. But with the economic collapse this gamble was even more risky and has resulted in many stores closed. Things are going well in the sense that SaveMart was able to double their size by absorbing a failing division and keep most of the stores open by introducing their systems. Things are not going well in the sense that they lack direction on how to continue the success of this.

Some of those stores had been successful Lucky stores, even the store built at the base of apartments (Fulton Market) was supposed to be a Lucky, and rebranding those stores to Lucky should've saved them. It's also worth noting that Albertsons LLC already cut out a handful of stores in that division shortly after taking over in 2006, and it was well known that the stores weren't doing particularly well (it was believed the Lucky would bring a boost in sales, which was probably true at least initially).

Frankly, I thought the "Lucky California" concept was probably a good direction, as it was original to Save Mart, kept the "Lucky" name without the complications of sharing the same logo Albertsons owns (the Lucky logo is on Albertsons marketing materials), and differentiated itself from competitors by mixing in international items with everything else. Had they kept prices under control and made merchandise mix store-specific, it might've done the company a lot of good. Too bad it never went anywhere.

[storewanderer]

The thing is that when SaveMart bought Albertsons NorCal, they were not buying a successful chain. Albertsons sold the NorCal division because it was struggling and just didn't make sense to pour money into. Safeway and Raley's have a history of both being pretty good operators and they to this day dominate the NorCal market. When SaveMart bought Albertsons NorCal, they were certainly making a gamble not only as a whole but on a store by store basis. Some of the Albertsons stores just didn't make sense either do to poor location or demographics that just wouldn't support a conventional store. Yet, SaveMart took on these stores and tried to make them work. A good amount of them have worked, and SaveMart has been able to keep them afloat. But with the economic collapse this gamble was even more risky and has resulted in many stores closed. Things are going well in the sense that SaveMart was able to double their size by absorbing a failing division and keep most of the stores open by introducing their systems. Things are not going well in the sense that they lack direction on how to continue the success of this.

That's a good point; Albertsons was not well liked in NorCal to begin with (they were well liked in Reno, a market that had no Lucky presence after 1987). Albertsons LLC had already closed I think about 45 stores in NorCal and Save Mart closed another 5-6 during the takeover and conversion processes.

I disagree with you that things are going well. In my view these Save Mart Stores are struggling on many fronts and if it isn't one problem it is another.

First you have the problem with store conditions. Most of these stores are sitting with floors from the mid 1990's or late 1990's Lucky or Albertsons days; look around refrigeration and flooring is coming up all over the place. Another common problem with store conditions I see in these stores is the condition of the ceiling tiles; full of stains and dirty. Another common problem is the walls look dirty despite being repainted (did they even clean the walls first before they repainted them?). The more troubling part I find is the few busy locations seem to be in worse physical condition than the slow stores. I assume there is little to no maintenance to any location and it is troubling that they are not even maintaining the busy locations.

The problem I see with the busy locations is they tend to be mismerchandised and have in-stock problems. In stores above 45,000 square feet, there are a ton of problems (the smaller stores they seem to be able to merchandise okay). Perimeter departments are not being filled properly or used properly. The drug category is not being merchandised or promoted well at all. The placement of items as they have taken aisles out, shortened aisles, disassembled endcaps, and other moves to operate with less inventory has resulted in stores that don't flow well or feel well stocked.

The busy locations seem to be few and far between but they do have some busy locations. Like you point out, Sacramento-Folsom Blvd. is a great performer (was Albertsons best performer in NorCal), Auburn is a great performer, San Bruno Lucky is a great performer, and I know they have some good performers among the Food Maxx Stores and also among the original Save Mart territory. Still, the stores that perform well for them were also Albertsons best performers in NorCal. So I think those locations would do well regardless of who operated them. I don't feel like Save Mart has saved any stores or turned any stores around. Just because stores are still open does not mean they are in a good position and these stores really seem to be struggling, like a fish that is trying to survive in water than only covers 10% of its body is how bad a lot of these Save Marts look between the poor upkeep and total lack of customers present. Stores I am referring to that really do not look healthy in any way, shape or form are ones like Placerville-Missouri Flat, Carson City-South Carson Street, Carson City-North Carson Street, Reno-McCarran, both Luckys in Vacaville, the Lucky in Danville, Rocklin, Marysville are a few that come to mind. I just don't feel like the stores are operating to their potential.

Quite a few of these locations sit there all day with barely more than a dozen customers shopping at any given time. Rarely more than 1-2 checkouts open and even in that case rarely any lines. Extremely lightly stocked perimeter departments. Skeleton levels of staffing. These are not good conditions to try to build business with.

I feel like Albertsons who already did not do well in NorCal, Save Mart is doing on a whole 20% or so less volume in the locations than Albertsons was doing. Save Mart has slashed expenses though (they have a lot fewer departments, fewer department managers, fewer store managers, less merchandise to handle, less fresh merchandise, have typically cut store hours and cut perimeter department hours) so it would be quite interesting to see how this is going from a profit perspective. Perhaps Save Mart is doing better from a profit perspective due to its expense cutting activities.

[CalItalian]

I was in the San Jose area the last two weekends due to family deaths. Went into Food Maxx, former Safeway, on Story Road in East San Jose both weekends and it is a VERY busy store (much busier than it was as a Safeway and at times I found it to be a fairly busy store). For example, last Saturday was in around 11 am and the store was very busy. Most people had their carts pretty to very full. Not all checkout lanes open but were about 4 to 6 customers deep in each. Mostly Latino customers. Across the street at the Mi Pueblo, the store was nearly deserted and only had one checkout lane open at the same hour on a Saturday. Was the only customer at the service meat counter. I can see why, Mi Pueblo's prices are VERY high in comparison. Even their specials are high in comparison to what I am use to at Southern California Mexican markets. I had not been in a Food Maxx in years and I really don't like the layout - lower shelves in the center aisles of a warehouse store looked very odd - but customers seem to like it in comparison to the competition.

[storewanderer]

NorCal is an interesting market since it has so many not very good operators and they all have very high prices. These discount operators are few and far between so they do very well, generally speaking.

The bay area Food Maxx locations are all as you describe. Very busy stores, very full carts moving out. And if you look, their produce is pretty good, center store mix is just fine, employee attitude seems good... Where Food Maxx has more problems is when it goes up against Wal Mart and WinCo, such as around Sacramento, but even then Food Maxx usually still does enough business to be viable. The customers don't care about the shelves, they just want lower prices.

Mi Pueblo is pretty high priced, they made some real price increases during their bankruptcy. There is another little hispanic chain from Sacramento called La Superior who has even higher prices than Mi Pueblo and even less busy stores (though La Superior has cleaner stores and much friendlier employees than Mi Pueblo). It is sure a different world there than the SoCal hispanic operators. I am glad in Reno our hispanic store is Marketon which was previously King Ranch and is run more like a SoCal hispanic store.

I wonder what you would have seen in a standard Save Mart/Lucky.

We are seeing store growth in the Food Maxx banner and ongoing store closure activity in the Save Mart/Lucky banners. When I go into a Food Maxx, I have some degree of faith that this company actually knows how to run a store, move volume, merchandise, and even run promotions. When I go into a Save Mart, I feel like there is no hope. No future. There are so many problems from price, to quality, to store condition, to ineffective promotions, to mix...