Supervalu Exiting the Cincinnati Market

[storewanderer]

SuperValu is selling part of Biggs to Remke's, whatever that is, and closing the remaining stores. Based on the appearance of the Remke's ads, they are a conventional and not a hypermarket operator. Their prices also look very high from what I am seeing in their ad.

Too bad, given that this was a hypermarket concept.

Oddly, the Albertsons website portion that has a Biggs logo on it (www.biggs.com) is still showing up.

[Alpha8472]

Supervalu is exiting the Cincinnati market by closing 4 Bigg's stores and selling 6 to Remke.

http://supermarketnews.com/news/supervalu_biggs_0329/

[Alpha8472]

You beat me to it.

[Ohio Man]

Unfortunately, the thread I started which posited that biggs reducing its stores' hours of operation proved to be true.

It's a shame that biggs, or at least biggs as those of us in the Cincinnati area know it, is closing. I used to do my family's main weekly grocery trips at biggs until a few months ago when I started going to Kroger. The prices at biggs just got too high in the last eighteen months or so and I'm not Bill Gates. biggs used to clobber Kroger on price. In fact, their slogan was "true minimum price". But things changed rapidly after they instituted a gas reward card program in conjunction with local Sunoco stations. It is much more generous than the one offered by Kroger but biggs' prices got so high that they more than cancelled out the gas discount. You would think Supervalu, the nation's largest food wholesaler, would have continued to effectively compete with Kroger. But Kroger is a formidible rival, especially in its hometown of Cincinnati, and I think Supervalu's debt from its ill-advised purchase of Albertson's didn't help matters.

The biggs stores at their best provided a pleasant shopping environment in constrast to the manic ,factory-like atmosphere of Meijer and Super Wally, had a great selection which rivaled even Kroger, and had employees who, on the whole, were better at customer relations than Kroger, Meijer, or Super Wally.

Remke is a local player that I wish well. But I can't see them effectively competing with Kroger, Meijer and Wally. They've always been somewhat of a niche player, emphasizing friendly employees and good produce and fresh meats. And they have been very shrewd in the past at locating stores in Northern Kentucky, picking high traffic areas that can't fit a huge store like a Wally Supercenter. But except for some good weekly specials, their prices have always been rather high. And I don't see that changing with Supervalu continuing to supply the biggs stores that Remke is buying and starting to supply Remke's existing stores.

The biggs locations that are closing are the bigger (no pun intended) ones. I would like to see Giant Eagle enter the market by purchasing those locations. I respect Kroger but would hate to see
it become the only "conventional" (i.e., no general merchandise like Meijer and Wally) big supermarket chain in the area. Who knows if Giant Eagle would be intrested, though.

Don't mean to nitpick, Alpha8472, but Supervalu isn't totally exiting the Cincinnati area. They will coninue to operate their discount grocery Save-A-Lot stores.

[Alpha8472]

I see. Supervalu is really terrible at running supermarkets. It seems like what they want to do is go back and focus on being a wholesaler. That's the only thing they seem to be able to manage. They will sell off whatever stores they can and try to gain more customers as a wholesaler.

Most Save-A-Lot stores are owned by independent operators under agreement with Supervalu. It's sort of like a franchise agreement. Employees at Save-A-Lot stores are not paid by Supervalu, but by the owner of the individual store.

Supervalu should just go back and stick to wholesale. Someone else needs to come forward and buy all of the supermarket chains that Supervalu owns right now. There have got to be people out there that know how to run a supermarket chain.

[Ohio Man]

I'm aware of the usual Save-A-Lot arrangement. However, the Cincinnati Enquirer article which announced the Remke purchase/other biggs locations closing said that Supervalu would continue to operate the Cincinnati area Save-A-Lots. The Enquirer isn't a great daily paper and has been known to get things wrong at times but it seems safe to assume that the Save-A-Lots in the area are company stores, rather than franchise operations.

biggs was started by, I believe, a French-owned company in 1984. Supervalu bought the chain ten years later. They had a lot of success at first, and Supervalu continued that success for a while, taking over a former Thriftway store in Cincinnati's upscale Hyde Park neighborhood and taking over a former K Mart in Delhi Township, where Kroger needed some competition. I know biggs gave the Delhi Kroger fits, at least at first. So I think Supervalu did some things right in the past, but lately things haven't been going well at all.

[storewanderer]

Whatever inept virus was infecting the old Albertsons chain, has spread over to SuperValu and the downware spiral continues and seems to be infecting their original operations as well as the former Albertsons operations. Also it appears things like Jewel, which Albertsons basically left alone, are even going downhill under SuperValu.

It appears Albertsons LLC managed to somewhat cure itself of whatever the virus was.

[tesg]

I see. Supervalu is really terrible at running supermarkets. It seems like what they want to do is go back and focus on being a wholesaler. That's the only thing they seem to be able to manage. They will sell off whatever stores they can and try to gain more customers as a wholesaler.

Seems like Nash-Finch has been heading in that direction too in recent years.

[storewanderer]

I haven't observed much of Nash Finish beyond their Avanza disasters in Denver and their bang up job supplying the Super Kmarts. I did go into some Nash Finish supplied independents around Chicago and found them to be the worst of any independents I visited in that area in terms of mix and pricing on dry goods and I visited stores supplied by Spartan, Roundy's, Certified Midwest, SuperValu, AWG...

[krogerclerk]

The smaller bigg's in Cincy are essentially a Cub Foods with a different banner, while the larger biggs were true hypermarkets/supercenters with general merchandise. Biggs has expanded as far from Cincy as Louisville, KY. I believe the original owner of biggs was either Auchan or Carrefour. SVU also supplies the franchised Cub Foods in the Dayton market which may not be doing well since they are not buying any of the biggs locations. The larger vacant stores if recycled into retail would fit Target or Kroger Marketplace best but be too small for Meijer or Walmart.

Essentially what is happening in Cincinnati mirrors much of the rest of the nation's supermarket industry. The expansion of Walmart into the leading grocer has squeezed marginal players and resulting in consolidation. Kroger and Walmart ultimately gain the most ground from this, while Remke gains short term. The only chink in both Walmart's and Kroger's armor in Cincinnati is Meijer which could keep things interesting. Cincinnati has many independents, several of which are IGA affiliated, but they seem to have become less relevant since the 80's and are typically in the sketchier areas of Cincinnati that don't have Kroger nearby.