Bashas- Announcement?

[jamcool]

LLC can't run it's own stores, how do they think they can run Bashas" profitably?

A logical combination would be Bashas' and Stater Bros...similar store counts, adjoining markets, similar store sizes, same 'hometown" image...and they buy from the same private-label supplier (Topco)

[klkla]

Basha's and Stater Bros. operate similar type stores, but the real benefit of Albertson's acquiring Bashas would be to get rid of overlapping stores. At the current time the Arizona market is over stored... There are simply too many supermarkets where you have a declining population base and a very weak economy. ABS wants to effectively get rid of a competitor. This would be good for them but not neccessarily consumers. Unfortunately Bashas and Stater Bros. do not operate in the same marketing areas so those synergies wouldn't benefit them if they merged.

[storewanderer]

I don't really think Basha's and Stater are overly similar. For one thing I think one is union and the other is not. Stater seems more service oriented and more volume focused than Basha's. Plus Basha's runs all kinds of odd varying formats and I don't think Stater runs anything but their one format.

The real deal with this would be it would knock Safeway down to a very vulnerable 4th place position. This is not a good spot to be in. However, given the tract record of Albertsons LLC combined with the condition and volume level of many of Basha's stores I would expect many, many closures out of the combined entity and that may not have Safeway in 4th place for long but back in 3rd in short order.

Bashas and Save Mart might be a good fit but even there, you have differences (union, formats...).

The investor group that owns Smart and Final is doing some interesting things lately. Maybe they'll put an offer in for Bashas.

[klkla]

I don't really think Basha's and Stater are overly similar.

The main similarity is that they both generally operate smaller format stores in less densely populated areas. SaveMart, Stater Bros. and Basha's are all unique in that same way in the Southwest. The vast majority of their stores are 25,000 - 40,000 square feet and serve smaller communities.

The real deal with this would be it would knock Safeway down to a very vulnerable 4th place position.

Not really. This would actually strengthen Safeway because a combination of Basha's and Albertson's would lead to more overlapping stores being closed and reduce competition in AZ. Safeway does very well in Arizona. They have a modern store base and really good locations and have positioned themselves well with higher income customers in the state. Safeway is also the market share leader in Tucson and Flagstaff which are more affluent.

[storewanderer]

What is the share for Safeway and Fry's in Tucson now? The last numbers I have from 2006 show Fry's with 18 stores having 23.4% and Safeway with 26 stores having 22.9%. Wal Mart shows 6 supers and 2 neighborhood markets to have 19.3%.

Digging back more I found Fry's to have over 30% share in 2001 while Safeway's share was at around 26%. So, it is clear as Wal Mart has expanded in Tucson the loser has been Fry's and Safeway has done a better job holding on to customers.

However it would appear Fry's is much more productive on a per store basis than Safeway, and if they had similar store counts, the share for Fry's would likely be a lot higher than Safeway.

[klkla]

Tucson for 2008:

#1 - Safeway (20 stores 26.1%)
#2 - Fry's (19 stores 20.4%)
#3 - Basha's (18 stores 13.1%)
#4 - WalMart (4 stores 9.9%)
#5 - Costco (2 stores 8.1%)
#6 - Albertson's (7 stores 7.1%)

I would imagine with the bad economy there was probably slippage among the conventional chains and a slight increase by WalMart.

[storewanderer]

I think we are using different numbers and whichever I have are taking rural areas perhaps away from Tucson into consideration.

I did go over to the Wal Mart site and was surprised to see how few Supercenters they have there. Just 4 supercenters within 15 miles, but 5 neighborhood markets. I wonder what kind of share the neighborhood markets are getting. I would assume at least another few percent.

[jamcool]

The People's Republic of Tucson has a so-called "big box" ordinance in attempt to keep out the Super Wallys...the Super WM's are in adjoining areas outside Tucson city limits, like Marana. As are the new Fry's Marketplace stores.

[submariner]

The People's Republic of Tucson has a so-called "big box" ordinance in attempt to keep out the Super Wallys...the Super WM's are in adjoining areas outside Tucson city limits, like Marana. As are the new Fry's Marketplace stores.

How does that work with the Super Target at 4040 N Oracle? If I recall, isn't south of the river considered within city limits?

[klkla]

How does that work with the Super Target at 4040 N Oracle? If I recall, isn't south of the river considered within city limits?

Maybe it's grandfathered (built before the ordinance was passed). Looks like a very old building from bing.com map.