Publix buys Florida Safeway supermarkets

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Publix buys Florida Safeway supermarkets

Post by cathandler » June 28th, 2018, 2:43 pm

After an expensive conversion effort on its remaining three stores, Albertsons exits the Sunshine State. It begs the question as to why they bothered in the first place. Perhaps the lack of synergy with Rite Aid there was the deciding factor.
http://www.supermarketnews.com/retail-f ... es-florida

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Re: Publix buys Florida Safeway supermarkets

Post by wnetmacman » June 28th, 2018, 2:50 pm

I somewhat felt this would be the eventual result on this one. If they couldn't make Safeway work and do so quickly, it was destined to fail. Since Safeway is having problems in their normal home markets, three Florida stores running against over 700 Publix stores just wasn't going to happen.

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Re: Publix buys Florida Safeway supermarkets

Post by storewanderer » June 28th, 2018, 6:25 pm

Hilarious.

They take two old not very large downtrodden stores and one very large downtrodden store that were limping along as Albertsons (probably turned a little profit somehow) not doing great volume and come up with this idea to put Safeway in FL and take on Publix. They spend millions of dollars (and spent more money last year fixing the messed up floors) on remodels... supply stores from a distribution center days away (probably the more volume they did the more money they lost given the distance), constantly run $10 off $50 coupons, and various other very aggressive promotions and then pull out a couple years later?

Why did they even bother to go through all this?

Also the fact these stores were passed through so many divisions (first DFW, then Randalls, then finally Safeway East)...

With that said, this may be the only time people will actually MISS Safeway when it leaves a market (since they were giving away the farm to drive volume). These FL Safeway stores have great ratings on Yelp and Google, way better than Safeways in home territories in the west and east. It just goes to show you maybe Publix isn't so great... or customers in FL really do want an alternative, given how positively they view Safeway Stores that in most markets have a lousy reputation and lousy ratings on Yelp and Google to support that.

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Re: Publix buys Florida Safeway supermarkets

Post by architect » June 28th, 2018, 9:53 pm

storewanderer wrote:
June 28th, 2018, 6:25 pm
Hilarious.

They take two old not very large downtrodden stores and one very large downtrodden store that were limping along as Albertsons (probably turned a little profit somehow) not doing great volume and come up with this idea to put Safeway in FL and take on Publix. They spend millions of dollars (and spent more money last year fixing the messed up floors) on remodels... supply stores from a distribution center days away (probably the more volume they did the more money they lost given the distance), constantly run $10 off $50 coupons, and various other very aggressive promotions and then pull out a couple years later?

Why did they even bother to go through all this?

Also the fact these stores were passed through so many divisions (first DFW, then Randalls, then finally Safeway East)...

With that said, this may be the only time people will actually MISS Safeway when it leaves a market (since they were giving away the farm to drive volume). These FL Safeway stores have great ratings on Yelp and Google, way better than Safeways in home territories in the west and east. It just goes to show you maybe Publix isn't so great... or customers in FL really do want an alternative, given how positively they view Safeway Stores that in most markets have a lousy reputation and lousy ratings on Yelp and Google to support that.
Supposedly, the biggest strength of Albertsons/Safeway in Florida was their meat/seafood selection, which was much more extensive than Publix. Pricing also likely played a role in consumer preferences here, as these stores became so promotions-focused over the last few years that pricing was often lower than Publix's everyday mid-high pricing. Publix's biggest strength and claim to fame is simply their clean, well-maintained stores, consistent shopping experience and friendly staff. There is nothing that particularly sets them apart from other strong grocers; they largely stand out simply due to the fact that competition is so poor in many of their core markets.

Regardless, I am not surprised to see Albertsons finally pull the plug. With so much competition in the grocery industry today, Albertsons needs to be able to focus on beefing up operations in their core markets without the distraction of stores/banners which add little to the bottom line (particularly with the potential of now going public). My prediction is that Houston will be next to go (unless if Albertsons was to fight back into the market with El Rancho), and the remaining southern Louisiana stores could be potentially sold off to another operator at the same time (the remaining Shreveport store along with Longview, TX would likely just close outright considering strong local competition from both Kroger and Brookshires).

If Publix is able to make an entry into DC over the coming years, Safeway's presence there could also potentially be reduced.

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Re: Publix buys Florida Safeway supermarkets

Post by mjhale » June 29th, 2018, 10:56 am

architect wrote:
June 28th, 2018, 9:53 pm
If Publix is able to make an entry into DC over the coming years, Safeway's presence there could also potentially be reduced.
Does anyone know how Safeway is doing in the DC area under the new ownership? Safeway is the closest grocery store to my house. It is a spectacularly average store with no consistency from day to day and week to week. My experience with other Safeway stores in the DC area are from terrible to average. Pricing was better right after Safeway was purchased but it has crept back up to expensive to excessive. What I wonder is if Albertsons really has all of the debt that people talk about how long can they keep this thing going? Safeway isn't lighting the world on fire and with the amount of competition in my area there are far better places to shop. If Publix really wants into the DC market more power to them. Perhaps Albertsons would like to sell off a few locations to Publix like they did with Safeway in FL??

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Re: Publix buys Florida Safeway supermarkets

Post by Super S » June 29th, 2018, 9:53 pm

The conversion to Safeway really seemed desperate to me. Especially with only three stores. I am curious what their sales volume was compared to the days as Albertsons. It never made sense to me though to take a name that had a somewhat established presence in the state, and replace it with a name that really had no history in the state. Sure there are those who vacation from states with a strong Safeway presence, but you have to wonder how many people were alienated.

Publix at least has a good reputation and operates nicer stores, and it makes sense to let somebody take over stores that is experienced in running stores in the area.

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Re: Publix buys Florida Safeway supermarkets

Post by storewanderer » June 29th, 2018, 10:27 pm

Super S wrote:
June 29th, 2018, 9:53 pm
The conversion to Safeway really seemed desperate to me. Especially with only three stores. I am curious what their sales volume was compared to the days as Albertsons. It never made sense to me though to take a name that had a somewhat established presence in the state, and replace it with a name that really had no history in the state. Sure there are those who vacation from states with a strong Safeway presence, but you have to wonder how many people were alienated.

Publix at least has a good reputation and operates nicer stores, and it makes sense to let somebody take over stores that is experienced in running stores in the area.
I suspect they more than doubled their volume as Safeway. They were giving away the farm (literally) after they converted. They were also fulfilling Safeway.com orders with delivery vans via those stores which I suspect was getting them some action.

I almost wonder if this was some sort of an exercise to get a higher sale price for the stores. These stores were in pretty bad shape as Albertsons (needed to be remodeled) and were not exactly high volume. I am wondering if the Safeway remodels combined with the additional volume generated from their very strong ads, $10 off $50 coupons flooding the market, .com orders, etc. were needed to "get a higher price for the stores." I believe there was a bit of a risk to Publix that Safeway could go and build 5-10 stores a year in Florida and eventually get a presence that may hurt Publix... so it could have been Publix was willing to pay more to "get rid of Safeway" than it would have been willing to pay to "get rid of those last 3 Albertsons."

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Re: Publix buys Florida Safeway supermarkets

Post by buckguy » June 30th, 2018, 7:27 am

This seems to be making a lot out of very little. Were these locations that filled holes for Publix or enabled them to keep out competitors? Most likely Albertson's wanted to make them attractive for sale, rather than simply closing them. Building 5-10 stores a year in a state with a huge population base is not exactly a way to build market share.

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Re: Publix buys Florida Safeway supermarkets

Post by klkla » June 30th, 2018, 3:57 pm

There is a Publix literally across the street from all three stores.

I wonder if Publix will actually operate them or is buying them just to get rid of them.

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Re: Publix buys Florida Safeway supermarkets

Post by architect » June 30th, 2018, 6:59 pm

klkla wrote:
June 30th, 2018, 3:57 pm
There is a Publix literally across the street from all three stores.

I wonder if Publix will actually operate them or is buying them just to get rid of them.
There are actually several other instances of Publix having stores essentially on top of one another, so operating the former Safeway spaces is not out of the question. Due to Publix's typically smaller store sizes (at least compared to a new build Wegmans, HEB or Kroger Marketplace), they often have to operate stores more densely in order to have the inventory space to not constantly run out of product on a routine basis. However, even if Publix does open all three stores as they are reporting, they could close over time if the locations prove to be redundant. The Largo Safeway may actually be better located than the Publix across the street, as it is part of a dense shopping center anchored by Target and a variety of other stores. On the other hand, the Altamonte Springs Safeway seems to be poorly located from a traffic standpoint, requiring a left hand turn to enter the parking lot for most evening commuter traffic, while the adjacent Publix is much easier to access on the right side of the road. I am not familiar enough with the traffic patterns around Oakland Park to make a call there.

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