United Supermarkets announces a few more stores...in Lubbock

[pseudo3d]

http://www.kcbd.com/story/32428508/unit ... in-lubbock

This one I missed, but it appears that United Supermarkets is doubling down in Lubbock, building out a United store at a site with a gas station and a nice parking lot built five years ago that never got a real store, plus another store currently under construction, plus remodels at 7 of 9 of the stores they have in town (they unquestionably dominate Lubbock), AND an expansion of their DC.

While they've got the Lubbock market nailed down (there's a Natural Grocers, a Sprouts, and four Walmarts) and it's good that they're expanding (with the Lawrence Bros. buyout), I just can't help but wonder if this is really the right move. They've got one of the best, most untarnished names in the entire ABS/SWY chain and they haven't done a lot with it. None of their stores are particularly big (they all look around 40k square feet) and since the Albertsons buyout, Market Street in Dallas has gone quiet. The DC they built to service Dallas is just two doors down from the Tom Thumb warehouse, so I don't know if those will be consolidated. (In fact, I dare say the question is up in there if Market Street Dallas combines with the Dallas division somehow). It just seems like they can do so much more with their brands. Bring on the 100k square foot Market Street stores! Play ball with Fiesta Mart in Dallas with Amigos stores! You have the Albertsons Market brand, so expand to Oklahoma and do it under that name to avoid THEIR "United Supermarkets"! Develop a store with more general merchandise! Attack Waco with new stores that one-up H-E-B! Renovate flagging Tom Thumb stores on the edges of the Metroplex to new Market Street stores!

It was widely theorized that Albertsons LLC bought United as a defensive measure (perhaps a symbiotic agreement) to hold off H-E-B, so it has to be executed properly. You can't wait and do nothing as H-E-B starts slamming into the wall and you definitely can't hedge your bets on H-E-B botching a market entrance.

That's not to say they won't do these things eventually, but I'm confused...why play it safe in Lubbock when you can do better?

[storewanderer]

Egos run wide and for whatever reason Market Street is being kept under someone's thumb in Dallas. No pun intended.

[pseudo3d]

Market Street doesn't seem to be going anywhere (last year they expanded the operations to 24 hours at one store), but they do seem to be suppressed. Tom Thumb is expanding but they don't seem to be really trying to do anything new. If squeezing out Market Street was the goal, then Tom Thumb should be building 70k square foot stores and beyond in the suburbs, especially the southern on, instead they're focusing on the "safe" urban core much like Lubbock and United. A few notes that I want to point out:

- Brownwood, Texas is one of the farthest out stores the chain services, opening in June 2015, but it seems to have been announced before the buyout.
- The Roanoke (TX) warehouse of United isn't useless in its current state but it is underutilized for "future growth", and the information for it may be out of date considering that they're expanding their 500k DC in Lubbock to 700k, which, conveniently, is the same size of the Roanoke DC.
Meanwhile, the Roanoke (TX) warehouse of United is going underutilized. My guess is that sooner or later, they'll announce closure of the Roanoke DC and PR their way out of most of the backlash by offering opportunities at the Tom Thumb DC (even though due to the way United is set up, they're still separate companies)
- The Flower Mound store is only 55k square feet, though this was announced before Albertsons buying them.
- A few of the Tom Thumb stores do have pretty close overlap to Market Street, the Allen stores are only about three quarters of a mile away.
- The newest Tom Thumb stores announced are not knock-off Market Street stores since they do not have the amenities of a Market Street but rather what the best of the ABS chain has (burritos, beer and wine bar), though I'm not sure if it's the case for all of them.
- Even if United's DC is consolidated with Tom Thumb's DC, Market Street's management seems to be the same, as the stores do great business, and the recent conversions of, say, the Albertsons store in Abilene to Market Street brought a lot of business and favorable reviews.

For Albertsons sake, trying to focus on Tom Thumb in Dallas isn't a bad idea IF they can do it properly. When Randall's of Houston bought the chain, they brought it into the future, adding 70k square foot stores with huge perishable departments, and also returning the name--the larger stores had been named Tom Thumb-Page thanks to a merger with a drug store operator in the 1960s, and Randalls restored that name. But Randalls also did a lot of damage to the chain, cutting back the name to Dallas (reflagging the Austin stores as Randalls) and also doing a lot of unfortunate changes to the management, and worse, saddling the whole company with a lot of debt (Tom Thumb had more stores than Randalls), planting the seeds of destruction when the chain was sold to Safeway. Under Safeway, innovation pretty much stopped, store footprints shrank on average, and new stores stopped being added (I don't know how many Tom Thumb stores Safeway built, I know they did build a few in Houston after the buyout but none after 2002, and the numbers that weren't replacements I think I can count on one hand). Unfortunately, even if Albertsons is a better steward of Tom Thumb than Safeway (likely), innovation isn't their strong suit, and I can't even see them going bigger to compete with new Kroger or H-E-B stores.

[architect]

Market Street doesn't seem to be going anywhere (last year they expanded the operations to 24 hours at one store), but they do seem to be suppressed. Tom Thumb is expanding but they don't seem to be really trying to do anything new. If squeezing out Market Street was the goal, then Tom Thumb should be building 70k square foot stores and beyond in the suburbs, especially the southern on, instead they're focusing on the "safe" urban core much like Lubbock and United. A few notes that I want to point out:

- Brownwood, Texas is one of the farthest out stores the chain services, opening in June 2015, but it seems to have been announced before the buyout.
- The Roanoke (TX) warehouse of United isn't useless in its current state but it is underutilized for "future growth", and the information for it may be out of date considering that they're expanding their 500k DC in Lubbock to 700k, which, conveniently, is the same size of the Roanoke DC.
Meanwhile, the Roanoke (TX) warehouse of United is going underutilized. My guess is that sooner or later, they'll announce closure of the Roanoke DC and PR their way out of most of the backlash by offering opportunities at the Tom Thumb DC (even though due to the way United is set up, they're still separate companies)
- The Flower Mound store is only 55k square feet, though this was announced before Albertsons buying them.
- A few of the Tom Thumb stores do have pretty close overlap to Market Street, the Allen stores are only about three quarters of a mile away.
- The newest Tom Thumb stores announced are not knock-off Market Street stores since they do not have the amenities of a Market Street but rather what the best of the ABS chain has (burritos, beer and wine bar), though I'm not sure if it's the case for all of them.
- Even if United's DC is consolidated with Tom Thumb's DC, Market Street's management seems to be the same, as the stores do great business, and the recent conversions of, say, the Albertsons store in Abilene to Market Street brought a lot of business and favorable reviews.

For Albertsons sake, trying to focus on Tom Thumb in Dallas isn't a bad idea IF they can do it properly. When Randall's of Houston bought the chain, they brought it into the future, adding 70k square foot stores with huge perishable departments, and also returning the name--the larger stores had been named Tom Thumb-Page thanks to a merger with a drug store operator in the 1960s, and Randalls restored that name. But Randalls also did a lot of damage to the chain, cutting back the name to Dallas (reflagging the Austin stores as Randalls) and also doing a lot of unfortunate changes to the management, and worse, saddling the whole company with a lot of debt (Tom Thumb had more stores than Randalls), planting the seeds of destruction when the chain was sold to Safeway. Under Safeway, innovation pretty much stopped, store footprints shrank on average, and new stores stopped being added (I don't know how many Tom Thumb stores Safeway built, I know they did build a few in Houston after the buyout but none after 2002, and the numbers that weren't replacements I think I can count on one hand). Unfortunately, even if Albertsons is a better steward of Tom Thumb than Safeway (likely), innovation isn't their strong suit, and I can't even see them going bigger to compete with new Kroger or H-E-B stores.

In the DFW area, Market Street is in somewhat of an awkward position. Their existing stores are very successful, and have almost a cult-like following similar to HEB. However, they have done almost no marketing in the area (at least in recent years), and as a result, their stores are "out of sight, out of mind" for many shoppers which do not live in close proximity to their existing locations. There also seems to be little willingness to expand the brand further with new stores in DFW after the Albertsons acquisition. Sadly, I worry that Albertsons may ultimately take their strongest brand in the company and allow it to flounder in one of the fastest-growing metro areas in the country.

Although the Tom Thumb brand is still well-respected in DFW, their stores have developed a reputation for being quite generic (which they are, following the Lifestyle remodels), and as a result, the brand no longer holds the same clout that it once did. Also, the Tom Thumb brand was hurt by Safeway's unwillingness to build new stores in many of the fastest-growing areas of the Metroplex during the 2000's, where they dramatically trail in store count against Kroger (along with potential HEB sites). As a result, the Tom Thumb brand faces the same "out of sight, out of mind" issue which plagues Market Street, but rather in many new upper-class suburbs. In order for the Tom Thumb brand to be the "chosen" brand for DFW long-term, new stores and renovations must be embarked on pronto which would allow new amenities to be rolled out to better differentiate the chain against a resurgent Kroger and a looming HEB threat. In addition, the existing Market Street stores in DFW could even be rebannered under the Tom Thumb name, possibly by resurrecting the Flagship banner which would better differentiate them from your typical Tom Thumb.

The DFW market will be interesting to watch over the next couple of years. Although Albertsons has a good store count here, all three of their brands face unique competitive challenges which deserve more than just generic solutions.

[pseudo3d]

In the DFW area, Market Street is in somewhat of an awkward position. Their existing stores are very successful, and have almost a cult-like following similar to HEB. However, they have done almost no marketing in the area (at least in recent years), and as a result, their stores are "out of sight, out of mind" for many shoppers which do not live in close proximity to their existing locations. There also seems to be little willingness to expand the brand further with new stores in DFW after the Albertsons acquisition. Sadly, I worry that Albertsons may ultimately take their strongest brand in the company and allow it to flounder in one of the fastest-growing metro areas in the country.

Although the Tom Thumb brand is still well-respected in DFW, their stores have developed a reputation for being quite generic (which they are, following the Lifestyle remodels), and as a result, the brand no longer holds the same clout that it once did. Also, the Tom Thumb brand was hurt by Safeway's unwillingness to build new stores in many of the fastest-growing areas of the Metroplex during the 2000's, where they dramatically trail in store count against Kroger (along with potential HEB sites). As a result, the Tom Thumb brand faces the same "out of sight, out of mind" issue which plagues Market Street, but rather in many new upper-class suburbs. In order for the Tom Thumb brand to be the "chosen" brand for DFW long-term, new stores and renovations must be embarked on pronto which would allow new amenities to be rolled out to better differentiate the chain against a resurgent Kroger and a looming HEB threat. In addition, the existing Market Street stores in DFW could even be rebannered under the Tom Thumb name, possibly by resurrecting the Flagship banner which would better differentiate them from your typical Tom Thumb.

The DFW market will be interesting to watch over the next couple of years. Although Albertsons has a good store count here, all three of their brands face unique competitive challenges which deserve more than just generic solutions.

Albertsons doesn't want to slaughter the goose that lays the golden eggs (Market Street DFW) but it clearly faces reluctance to expand it or do anything with it. The lethargy on Market Street is highly disappointing especially as it could be a good counterpart to the urban Tom Thumb spin. The best way, I think, to deal with Market Street and Tom Thumb in Dallas is to kill the South division. Its name is even a relic as its history is rooted in "Southco" (the Skaggs Albertsons stores Albertsons took over), became Dallas-Fort Worth when Albertsons wanted over a dozen different divisions, then became South again when LLC didn't have that many stores in the South to begin with anymore (the small fleet of Florida stores, Louisiana, D/FW).

Tom Thumb has been re-molded to fit the parent company's vision for it, whether it be a Randalls in all but name or a Safeway in all but name. So with this strategy, South could be killed as a division (gotta save money) only with a small district office remaining (much like Tom Thumb under Randalls/Safeway, or Carrs in Alaska) and have the Tom Thumb name be moved into the United Family. Then United could fix Tom Thumb's operations until it became equivalent to Market Street, and be free to move Tom Thumb throughout Dallas-Fort Worth as a unified name (the Albertsons on the periphery of D-FW can be named Albertsons Market, just like the stores they got after the merger). They could also use the huge DC Tom Thumb had to expand dramatically in Dallas (adding Amigos as well), expand to Oklahoma, and successfully compete against H-E-B.