DFW Tom Thumb/Albertsons/MArket Street Observations

[wnetmacman]

For Houston, it was a unique situation. H-E-B decided to go for a back-door method that cannot work today...pushing low-end Pantry stores into the Houston area and competing with Food Lion on price. These stores lacked things like delis and pharmacies, but they beat Food Lion to the market, prevented them from being entrenched, and got a deep root in the market before anyone knew what was going on.

The demise of Food Lion in TX/OK/LA had nothing to do with HEB. ABC's Primetime Live ran an article just days after the first few stores opened in DFW that just flat out smeared Food Lion in almost every way, but specifically toward bad, relabeled tainted meats that were being sold in virtually all their stores. This hit the then-new Texas stores very hard, as they were trying to enter two major new markets (Dallas, and later Houston), and it then became very difficult for them; the parking lots went from packed to empty in just a day or two. The stores were small, which was okay in Houston as HEB proved, but in Dallas, they were too small, thus allowing the competition to rake up what was left; no pharmacies, and a standard 35000sf store that was plopped in bad locations like a cookie cutter.

Sounds a lot like the A&P meltdown, which happened shortly before the Safeway meltdown.

The A&P meltdown is probably going to go down in history as the longest possible death of any chain. Safeway, on the other hand, had grown since the 1980's issues they had by buying other chains. Some were successful purchases; others, not so much. The unsuccessful ones had hurt them more than the successful. Albertsons was, and may again be, a victim of their own arrogance. Buying chains they had no business in, then breaking up, shedding the dead weight, and now they're back at the buying chains again. It's a vicious cycle.

Safeway's fallout in the late 80's created major holes in many cities, but none more than in Texas. Houston was a pullout and complete sale; Dallas was a complete pullout. I knew some folks in Longview that were affected by that pullout. The downtown store in Longview was for a long time one of the top Safeway stores in Texas. A bag boy made $16/hour at the pullout; he was working for the replacement in that store for $9 as a stocker 3 years later. Safeway was union; almost all of the buyers (other than the 47 stores that never reopened) were non-union, and that was the battle.

[pseudo3d]

For Houston, it was a unique situation. H-E-B decided to go for a back-door method that cannot work today...pushing low-end Pantry stores into the Houston area and competing with Food Lion on price. These stores lacked things like delis and pharmacies, but they beat Food Lion to the market, prevented them from being entrenched, and got a deep root in the market before anyone knew what was going on.

The demise of Food Lion in TX/OK/LA had nothing to do with HEB. ABC's Primetime Live ran an article just days after the first few stores opened in DFW that just flat out smeared Food Lion in almost every way, but specifically toward bad, relabeled tainted meats that were being sold in virtually all their stores. This hit the then-new Texas stores very hard, as they were trying to enter two major new markets (Dallas, and later Houston), and it then became very difficult for them; the parking lots went from packed to empty in just a day or two. The stores were small, which was okay in Houston as HEB proved, but in Dallas, they were too small, thus allowing the competition to rake up what was left; no pharmacies, and a standard 35000sf store that was plopped in bad locations like a cookie cutter.

H-E-B Pantry did beat Food Lion to the market, and this happened I believe before the segment aired in late 1992. Food Lion never managed to get more than a dozen in town, and bad locations did happen...one even wound up becoming a public elementary school.

Sounds a lot like the A&P meltdown, which happened shortly before the Safeway meltdown.

The A&P meltdown is probably going to go down in history as the longest possible death of any chain. Safeway, on the other hand, had grown since the 1980's issues they had by buying other chains. Some were successful purchases; others, not so much. The unsuccessful ones had hurt them more than the successful. Albertsons was, and may again be, a victim of their own arrogance. Buying chains they had no business in, then breaking up, shedding the dead weight, and now they're back at the buying chains again. It's a vicious cycle.

Safeway's fallout in the late 80's created major holes in many cities, but none more than in Texas. Houston was a pullout and complete sale; Dallas was a complete pullout. I knew some folks in Longview that were affected by that pullout. The downtown store in Longview was for a long time one of the top Safeway stores in Texas. A bag boy made $16/hour at the pullout; he was working for the replacement in that store for $9 as a stocker 3 years later. Safeway was union; almost all of the buyers (other than the 47 stores that never reopened) were non-union, and that was the battle.[/quote]

Houston's spin-off was less disastrous than the meltdown in Dallas, but it still failed. AppleTree went bankrupt less than 3 years after rebranding the stores and by December 1993, when they announced that they would wind down business, had already lost half of the stores they had started out with. Most went to Kroger or Randalls. (The AppleTree stores that continued after 1993 were essentially kept open as an independent, and eventually faded away)

But there are a LOT of interesting parallels between Safeway and A&P...market leaders for their time (A&P East Coast, Safeway West Coast), an implosion as newer competitors came in with better stores and cheaper workers, an attempt to purchase some new chains to reclaim their lost glory, said new chains just got destroyed by mismanagement, and a last-ditch attempt to remodel a bunch of stores with a new format. The big difference is that while A&P got hit with bankruptcy (twice), Safeway took the first buyout offer they could.

Now, I don't know about Albertsons as a whole, but while Randalls in Houston is still stuck, the Dallas market has legs. To me, the course of action from here would be for Tom Thumb to eliminate the shopper's card as Albertsons and Tom Thumb continue to homogenize. Then, remodel the Albertsons stores as Tom Thumb stores, and re-open in-fill Tom Thumb/Albertsons stores in Dallas. Meanwhile, United starts building bigger Market Street stores in the suburbs to compete (indirectly) with Kroger Marketplace. It won't prevent H-E-B from entering or cause Kroger to leave, but it will lessen the blow H-E-B's promotion of no-card shopping and their potential of huge, upscale stores.

[wnetmacman]

The big difference is that while A&P got hit with bankruptcy (twice), Safeway took the first buyout offer they could.

Safeway has a storied history related to that 80's meltdown that resulted from the KKR Buyout in 1986. Safeway always sold out. A&P wanted to think folks would buy a part of history. Their gamble lost more than Safeway's did.

[veteran+]

The big difference is that while A&P got hit with bankruptcy (twice), Safeway took the first buyout offer they could.

Safeway has a storied history related to that 80's meltdown that resulted from the KKR Buyout in 1986. Safeway always sold out. A&P wanted to think folks would buy a part of history. Their gamble lost more than Safeway's did.

And Safeway's meltdown continued with alacrity under Steven Burd (the CEO accountant). He is probably the most hated CEO in Safeway's history and the most vicious (with his people). He ran Safeway solely as a financial machine not as a grocery store. People (employees and customers) were irrelevant.

As noted, A&P had been in decline for decades (categorically). The German company (Tengleman?), hastened A&P's road to perdition. By the time they were done, there was very little anyone could do to save this company.

And btw, imo, the unions had nothing to do with A&P's fall. There are so many other retailers that prospered (or at the very least survived intact) that have been unionized for decades. Unions are a very easy scapegoat for utter incompetence or greed of the corporate world (or political talking heads). Are unions perfect? NO
Do they have "skeletons" in their closet? YES

Just saying............

[pseudo3d]

Here's a map showing the Albertsons, Market Street, and Tom Thumb stores in the Dallas area from the Dallas Morning News.



Cross-referencing that with the Minyard Sun Fresh Market map, we can make some interesting observations about the brands in D-FW.



- There is a lack of any stores in the Southeast Dallas area. It's not as gaping as the hole that's Randalls (missing half of the city), though it seems to be a rougher part of town.
- Divestments heavily affected the remaining North Dallas Albertsons, so much that there's only one remaining in Dallas proper. This indicates that the Albertsons name will be squeezed out of North Dallas.
- Despite divestments, a number of Tom Thumb and Albertsons stores remain in close proximity, and even legacy Tom Thumb stores.
- Suburbs on the periphery, including Cleburne due south of Fort Worth, prefer Albertsons.
- Fort Worth, despite blank spaces, seems to prefer Albertsons. One of those Tom Thumb stores is much smaller than other TT stores (and the Albertsons up the road), so it's possible it could close.

[architect]

Here's a map showing the Albertsons, Market Street, and Tom Thumb stores in the Dallas area from the Dallas Morning News.

image

Cross-referencing that with the Minyard Sun Fresh Market map, we can make some interesting observations about the brands in D-FW.

image

- There is a lack of any stores in the Southeast Dallas area. It's not as gaping as the hole that's Randalls (missing half of the city), though it seems to be a rougher part of town.
- Divestments heavily affected the remaining North Dallas Albertsons, so much that there's only one remaining in Dallas proper. This indicates that the Albertsons name will be squeezed out of North Dallas.
- Despite divestments, a number of Tom Thumb and Albertsons stores remain in close proximity, and even legacy Tom Thumb stores.
- Suburbs on the periphery, including Cleburne due south of Fort Worth, prefer Albertsons.
- Fort Worth, despite blank spaces, seems to prefer Albertsons. One of those Tom Thumb stores is much smaller than other TT stores (and the Albertsons up the road), so it's possible it could close.

Really interesting find!
1. Most of the area immediately South and Southeast of Downtown Dallas (and into Pleasant Grove and Balch Springs) is low-income, and there are many pockets of crime through this area. There are multiple former Albertsons locations in this area (and even possibly an old Tom Thumb), but all have been long closed. Kroger couldn't even make it here, as evidenced by the empty Greenhouse at Burton Rd. and Masters Dr.
2. There are actually two Albertsons in Dallas proper, one at Casa Linda and one at Frankfort/Tollway. The Casa Linda store is at a key intersection in a rapidly gentrifying area, giving this location a solid customer base (and making it a store Albertsons will likely keep, even if is rebranded). The Frankfort/Tollway store has decent traffic, but is located in a transition area (high-end homes nearby, but also some aging apartments) and is also not far from a Tom Thumb at Frankfort/Preston. This location could ultimately stay or go.
3. I am honestly surprised that the FTC did not require more store divestitures, as there are still many instances of Tom Thumb/Albertsons having stores nearby across DFW. However, in some of these areas, development is slow or nonexistant, so the FTC may have been more concerned about the possibility of a vacant store than concerns about competition. In particular, Carrier Pkwy. in Grand Prairie and Cartwright Rd. in Mesquite are good examples of this.
4. When Tom Thumb/Randalls were still in growth mode, many of the Southern suburbs were not nearly as developed as they are now. In its heyday, Albertsons had a tendancy to move into areas which were on the verge of developing, while Tom Thumb tended to only move into areas which were already well built-out. As a result, Albertsons was once more common in the suburbs than Tom Thumb (although many of these Albertsons stores have since closed).
5. I am a bit surprised that Albertsons is so dominant in Fort Worth, as the stores I have visited have not been particularly upscale or even well-maintained. One unique factor here may be the demographics of Fort Worth. Most areas of the city are either very high-end (especially around TCU) or are rapidly aging and are not prime areas for new store construction. As a result, grocers may be reluctant to invest in the city proper until they are sure of what direction a particular neighborhood is going. Much of the Fort Worth middle class is actually concentrated in the suburbs.
5.

[architect]

Update on the Good Day milk from a couple of weeks back: I visited another Market Street store, and sure enough, it was produced at the same plant as Red River Farms. Interestingly though, the Good Day milk still had Albertsons name listed at the bottom.



Also, here is a photo of one of the Tom Thumb stores with a mixed lighting update (75/Northwest Highway). Note: there are more fluorescent strips behind where I am standing, in a place where the ceiling drops down slightly.

[klkla]

I didn't realize that United has already converted a few Albertson's to the Market Street banner in Midland/Odessa area. The Yelp reviews seem to be generally positive about the conversions.

There are some photos at this link. They kept the Albertson's bright fluorescent lights but other than that it looks pretty good:
http://www.mrt.com/business/development ... ge&photo=1

[architect]

I didn't realize that United has already converted a few Albertson's to the Market Street banner in Midland/Odessa area. The Yelp reviews seem to be generally positive about the conversions.

There are some photos at this link. They kept the Albertson's bright fluorescent lights but other than that it looks pretty good:
http://www.mrt.com/business/development ... ge&photo=1

Interestingly, the decor looks completely different from the DFW Market Street stores. Also, it looks like they kept the Starbucks kiosks instead of converting to Peet's like most Market Street locations. The old lighting does look really tacky, and could be swapped out very easily.

[pseudo3d]

I didn't realize that United has already converted a few Albertson's to the Market Street banner in Midland/Odessa area. The Yelp reviews seem to be generally positive about the conversions.

There are some photos at this link. They kept the Albertson's bright fluorescent lights but other than that it looks pretty good:
http://www.mrt.com/business/development ... ge&photo=1

Interestingly, the decor looks completely different from the DFW Market Street stores. Also, it looks like they kept the Starbucks kiosks instead of converting to Peet's like most Market Street locations. The old lighting does look really tacky, and could be swapped out very easily.

The Starbucks was brand-new. It says so in the article:

Market Street renovations are nearly complete Tuesday, 6-23-15, at the old Albertson's Grocery on Midkiff and Loop 250. One of the additions is a full service Starbucks inside the store."