[CONFIRMED] Albertsons FL converting to Safeway

[storewanderer]

It is a bit closer. We will see how this goes. It is hard to tell if this cycle of events was what they planned all along or they are continually changing their mind as they go with FL. I don't think it made sense to put Safeway bannered stores under Houston (which is already dealing with Albertsons bannered stores and Randalls bannered stores).

[pseudo3d]

It is a bit closer. We will see how this goes. It is hard to tell if this cycle of events was what they planned all along or they are continually changing their mind as they go with FL. I don't think it made sense to put Safeway bannered stores under Houston (which is already dealing with Albertsons bannered stores and Randalls bannered stores).

I'm not sure how the stores will turn out, but it does seem like a hard sell because no other out of state grocer has really survived in Florida for very long (except for Walmart and their ilk, but...) and I think Albertsons only made it for so long because of their longevity and the fact that the original Skaggs Albertsons were very large, somewhat unique stores that not only had a full drug section but many other departments uncommon to supermarkets (automotive products, hardware, records). The new stores have much more things in common with Publix but not quite executed as well (from my impression of the things I've read), even if it is larger and prices are marginally lower.

[klkla]

Are they using Safeway club cards at this store? I was just looking at the ad for the Oakland Park store and it doesn't say anything about the card until the very last page where they have a section for $5 Fridays 'With your card'. Or is that just a case of right-hand not knowing what left-hand is doing?

[pseudo3d]

Are they using Safeway club cards at this store? I was just looking at the ad for the Oakland Park store and it doesn't say anything about the card until the very last page where they have a section for $5 Fridays 'With your card'. Or is that just a case of right-hand not knowing what left-hand is doing?

I'd bet that's just a residual from the Safeway ad template, since these are possibly the only modern Safeway ads in existence that don't use the club card. I also haven't read at all at any cards at this store.

I wonder if Eastern Division (which is less "Eastern" since it only covers up to Washington DC...maybe "Southeastern"?) will be the non-Albertsons division to drop the card?

[storewanderer]

A residual from the Safeway ad template referencing the club card for a grand opening in new to market stores in Florida as part of the $5 Friday promotion (the best prices in the ad are there) is a total oversight and shows what is wrong with this company. They can't even get a grand opening ad to show promotion programs properly.

I also am surprised they are not offering the Club Card or Just for You. Getting people to sign up for this who come in to check the store out for the grand opening, then they could target those people with special ads later on if they find sales are dropping off. It would also be very beneficial for them to get the data on what neighborhoods their shoppers are coming from to try and get an idea what customers are drawn to their stores in Florida.

You only get one chance to make a first impression.

[pseudo3d]

A residual from the Safeway ad template referencing the club card for a grand opening in new to market stores in Florida as part of the $5 Friday promotion (the best prices in the ad are there) is a total oversight and shows what is wrong with this company. They can't even get a grand opening ad to show promotion programs properly.

I also am surprised they are not offering the Club Card or Just for You. Getting people to sign up for this who come in to check the store out for the grand opening, then they could target those people with special ads later on if they find sales are dropping off. It would also be very beneficial for them to get the data on what neighborhoods their shoppers are coming from to try and get an idea what customers are drawn to their stores in Florida.

You only get one chance to make a first impression.

I'm pretty sure the Safeway conversions earlier this week are soft openings, as usually grand openings are noted in the news. Personally, I think this isn't altogether a terrible policy, as it can give time to iron out any kinks, and shoppers cards/rewards programs aren't really necessary in collecting shopper data anymore unless everyone still pays with cash...credit cards and data mining have more or less rendered that unnecessary.

[storewanderer]

The stores have been functioning as Safeways for the past few months. That was the "soft opening."

Sure, they can buy shopper data from credit card companies and do other things. But Safeway has always run with the club card and it appears Albertsons wants to keep that going based upon rolling out the Just for You program in Dallas Albertsons locations. That and language in the Albertsons IPO Prospectus that completely talks up the loyalty card program and how it is a competitive weapon. Maybe that is not referring to the whole chain but will only apply in some stores, sort of like "GOLD- Grand Opening Look Daily" is clearly not even coming close to applying in my small sample of NorCal Division stores when stores look the way the stores I've photoed look in the middle of the day on weekend afternoons look.

Kroger has employees in its departments all day so the departments always look full. The Smiths produce department looks fully stocked at 10 PM if I go in there. Picture perfect, actually. There are typically two employees on duty to 10 PM in the store I frequent. Perhaps Albertsons needs to rework the "GOLD- Grand Opening Look Daily" program because it is not working with their current labor allocation methods. And since I am seeing these problems in multiple stores I have to believe this is not a case of poor store management but rather a case of corporate management that is not giving the stores the necessary resources to execute properly.

[veteran+]

STOREWANDERER,

Are you able to compare prices between Safeway and Publix?

I'm curious because if the Safeway prices are not significantly less than Publix then they will fail.

Safeway categorically would not know how to compete with Publix and even if they knew a little or successfully recruited a top ex-Publix official they still would lose. Publix is a very good operator (not so good anymore in Miami proper) but they are not the greatest operator of retail grocery stores in the country (though they are tooted to be). Part of their success is that they have been entrenched in their southern territories (specifically Florida) for so long with very weak competitors and by de-facto their customers are almost cult like loyal (it's strange to me because most of the stores are very nice but not special and depending on the store many employees are not spectacular at all). The most powerful (and successful at the time) competitor Publix ever faced (at several different times) was Food Fair and Pantry Pride.

If Safeway was smart they would go for the jugular of Winn Dixie (who is very weak right now) and become what Winn Dixie is supposed to be. IMO, Safeway needs to be the Stater Brothers of Florida. Florida has a huge market on both coasts that closely matches the demographics of where Stater Bros. operates. Nice stores (not fancy or special), well tweaked to the neighborhood, lowest prices but friendly and very good service, family oriented, middle to lower income is what Safeway can do in Florida. This customer base would welcome an alternative to the honestly high priced "legendary" Publix.

Again, Winn Dixie used to be that for folks that just wanted basic food stuff in a friendly low priced neighborhood store. These new fancy Winn Dixies are sort of a betrayal of their original customer base.

[pseudo3d]

The stores have been functioning as Safeways for the past few months. That was the "soft opening."

Originally, the Safeway stores weren't supposed to open until June. The lack of a grand opening or an announcement of it is a bit concerning, though I don't live in Florida so I can't report on that. Usually when ACME (or even Albertsons) does openings, there's usually a small crowd, a ribbon-cutting, and a newspaper article on the thing. Perhaps cake will be served to early customers. Still, I think it's early enough in the game to be able to do a Grand Opening for the stores after the Memorial Day weekend.

Sure, they can buy shopper data from credit card companies and do other things. But Safeway has always run with the club card and it appears Albertsons wants to keep that going based upon rolling out the Just for You program in Dallas Albertsons locations. That and language in the Albertsons IPO Prospectus that completely talks up the loyalty card program and how it is a competitive weapon.

Maybe I'm looking at the updated version but nowhere do I see where they refer to the Safeway card and how it is a competitive weapon. They mention J4U and MyMixx, but not as a particularly competitive stance.

STOREWANDERER,

Are you able to compare prices between Safeway and Publix?

I'm curious because if the Safeway prices are not significantly less than Publix then they will fail.

Safeway categorically would not know how to compete with Publix and even if they knew a little or successfully recruited a top ex-Publix official they still would lose. Publix is a very good operator (not so good anymore in Miami proper) but they are not the greatest operator of retail grocery stores in the country (though they are tooted to be). Part of their success is that they have been entrenched in their southern territories (specifically Florida) for so long with very weak competitors and by de-facto their customers are almost cult like loyal (it's strange to me because most of the stores are very nice but not special and depending on the store many employees are not spectacular at all). The most powerful (and successful at the time) competitor Publix ever faced (at several different times) was Food Fair and Pantry Pride.

If Safeway was smart they would go for the jugular of Winn Dixie (who is very weak right now) and become what Winn Dixie is supposed to be. IMO, Safeway needs to be the Stater Brothers of Florida. Florida has a huge market on both coasts that closely matches the demographics of where Stater Bros. operates. Nice stores (not fancy or special), well tweaked to the neighborhood, lowest prices but friendly and very good service, family oriented, middle to lower income is what Safeway can do in Florida. This customer base would welcome an alternative to the honestly high priced "legendary" Publix.

Again, Winn Dixie used to be that for folks that just wanted basic food stuff in a friendly low priced neighborhood store. These new fancy Winn Dixies are sort of a betrayal of their original customer base.

From what I've read, Safeway prices are slightly cheaper or at least competitive than Publix is. I don't think that's enough alone to compete with Publix, honestly, though. Operations and a fraction of the store count are an issue too.

[storewanderer]

Veteran, When I was in the stores a month and a half ago their prices on staple items like eggs, butter, etc. were slightly less than Publix (like 10 cents less for private label items). The other packaged goods were all priced higher than Publix throughout the store and there weren't many items on special beyond what was on ad. This pricing was clearly Safeway pricing, not Albertsons pricing. The produce was generally priced lower than Publix but not by much (not like a Sprouts price structure that would draw people in). Also adding features like a large natural foods department and Starbucks I don't think is catering to a Stater-like customer. My impression is Albertsons vision for the Florida Safeways was to be an upscale operation based on what they did and how they did it. I will agree with you that they will never be able to overtake Publix and Publix has a good lock on this market. Winn Dixie is asleep at the switch and if they were smart they would be, as you say, going after those customers who want an affordable decent quality store to shop in. They could easily pick customers off of Wal Mart. Kroger has demonstrated that with some good specials and a lot of key item prices within 5% of Wal Mart it is very easy to pick off the Wal Mart customers. They will pay 10-20% more but they won't pay double like Safeway/Albertsons seems to think. Wal Mart is easy pickings over the past few years as they have upped their grocery prices and it is about to get even easier as they discontinue the price matching program (ironically Florida seems to be the most concentrated market where they are discontinuing it).

But now that the stores are in Eastern Division, who knows how that will impact pricing. I would assume the Eastern Division has a higher price scale than the Texas Division? Safeway may have realized what you have previously pointed out, that food prices in FL tend to be higher than the rest of the South (why? no Kroger...) so there is no reason to price Florida Stores with Texas pricing when they can get Eastern Division pricing on them.

These companies are really keen on price. To give you another idea. Up here in Reno and also in Carson City and Fernley, Wal Mart sells dozen large eggs at all stores for $1.14. Why? To try and get close to WinCo's price of $1.05 (though WinCo only operates 2 stores in Reno in this market). The other competitors in Reno have various prices (Safeway 3.59 and then 2.99 sale, Raleys 1.98, Save Mart 1.98, Scolaris 1.79, Smiths 1.59). Go out to Fallon, NV (which is 30 minutes from Fernley, NV where Wal Mart's only competitor is Scolaris) where Wal Mart's only public competitor is Safeway (featuring the $3.59/2.99 card price eggs) and suddenly their dozen egg price jumps to $2.20.