Kroger buying Haggen?

[marshd1000]

I have read about rumors about Kroger buying Bellingham, Washington based Haggen Foods. Haggen owns both the Haggen and Top Foods chains. Top Foods is mostly in the Greater Seattle area and Central Washington. Haggen is in Northwest Washington and the Portland, Oregon area. Has anyone here heard about these rumors and are there any truth to them?

[storewanderer]

I've heard these rumors but suspect they are total BS.

[Brian Lutz]

I haven't heard anything, but I suspect the fact that Kroger already has two of the major chains in the area (QFC and Fred Meyer) and very little in the way of major competition (Safeway, Albertsons and Walmart, with Albertsons in ongoing decline and Walmart having no stores in large portions of the Seattle area) means they'd have a really tough time getting that one past antitrust regulators.

[klkla]

Last year in the Seattle area, market share was:

#1 - Safeway 24.9%
#2 - Fred Meyer (Kroger) 15.8%
#3 - QFC (Kroger) 14.4%
#4 - Costco 13.0%
#5 - Albertson's 6.1%
#6 - Haggen 4.7%
#7 - Walmart 3.7%
#8 - WinCo 2.2%

So there's actually a fairly large amount of competition. If they bought Haggen I would imagine they would merge it into QFC which would give them 19.1% still a distant second to Safeway.

The area that could be more problematic would be Bellingham where Haggen is based:

#1 - Haggen 30.2%
#2 - Brown & Cole Stores (local independent) 20.8%
#3 - Fred Meyer 16.8%
#4 - Costco 14.1%
#5 - Safeway 4.7%

[storewanderer]

But wouldn't the FTC look it as Kroger already has 30.2% share in Seattle and this would give them another chunk of share putting that much more ahead of the next nearest competition? As far as Bellingham goes, what's with the low Safeway presence?

Haggen is an excellent operator (based on what I saw of the Portland, OR area Haggen Stores anyway; I don't know what Top Foods is like) and I don't think Kroger is the right buyer for them. I also don't think Safeway would be the right buyer but it looks like these stores would be of more use to Safeway than Kroger.

Years ago, Raleys talked of expanding into the Pacific Northwest and into Utah. I always suspected Haggen was their Pacific Northwest target and Harmons was their Utah target.

[Super S]

Very good point. When you combine both Fred Meyer and QFC Kroger is already #1. The Haggen stores I could maybe see merged into QFC, but TOP Foods if anything would probably end up as Fred Meyer Marketplace stores. It would seem more logical for Safeway to take over. And, as a side note, Safeway did in fact take over the Kelso TOP Foods store several years ago.

I could actually see the Portland stores being sold off though and becoming QFC. There isn't really a whole lot of overlap as QFC doesn't really have many stores in Portland to begin with. And Haggen has even fewer stores in Portland than QFC.