🛒 Kroger-Albertsons Merger: Northwest, Rockies, & Alaska Impact

[ClownLoach]

Kroger is keeping most of Harris Teeter. Maybe they would run Haggen like them?

Why change what isn't broken?

Harris Teeter has separate distribution and even a lot of separate systems/IT from Kroger. The loyalty program is semi integrated but not entirely. It also still has separate private label in many categories though it does have the Simple Truth and maybe Private Selection line. Also a number of Harris Teeter brand items are manufactured at Kroger plants.

Harris Teeter is less integrated into Kroger than United-TX is integrated into the large Safeway ship.

At this point Haggen has already been integrated into Safeway from a systems perspective, fully on their private labels, but hasn't switched to many of their fresh/perimeter programs. Also Haggen still does its own ad, does some limited buying for only its stores, and still runs a number of its own fresh/perimeter programs. While it would be smart for Kroger to keep Haggen doing what it does I am not sure. One interesting play could be when Kroger gives QFC to C&S (good riddance), the remaining QFC Stores could be converted into Haggen Stores and follow the Haggen format and programs. I really do believe that Haggen's original format as they ran in WA/OR for decades is a winner with potential and could be a good fit for former QFC Stores. The thing they tried to run in the divested Albertsons/Safeway/Vons units was nothing like the true Haggen format.

This would make sense to convert QFC to Haggen, although I doubt very many QFC stores will be retained (besides University Village, Vancouver-Camas).

[Brian Lutz]

If I had to guess, I could see some of the nicer "core" QFC stores on the Eastside like the Downtown and Crossroads stores in Bellevue, Bella Bottega in Redmond, Kirkland Urban and possibly University Village, Mercer Street and Broadway Market (which could easily be rebranded to Fred Meyer) in Seattle that might be retained. Unlike Harris Teeter though, the QFC stores have been basically turned in to Kroger stores in all but name at this point, so unless they wanted to rebrand those to Safeway the most logical thing to do would to just brand them to Kroger and be done with it.

As for Harris Teeter, there's no Safeway/Albertsons stores in the majority of their territory so I don't expect much impact. Aside from a few Simple Truth products on the shelves and the somewhat more Kroger-like recent logo redesign there's little sign that it's a Kroger brand, although our old loyalty card phone number from Fred Meyer does seem to work on their systems.

[ClownLoach]

If I had to guess, I could see some of the nicer "core" QFC stores on the Eastside like the Downtown and Crossroads stores in Bellevue, Bella Bottega in Redmond, Kirkland Urban and possibly University Village, Mercer Street and Broadway Market (which could easily be rebranded to Fred Meyer) in Seattle that might be retained. Unlike Harris Teeter though, the QFC stores have been basically turned in to Kroger stores in all but name at this point, so unless they wanted to rebrand those to Safeway the most logical thing to do would to just brand them to Kroger and be done with it.

As for Harris Teeter, there's no Safeway/Albertsons stores in the majority of their territory so I don't expect much impact. Aside from a few Simple Truth products on the shelves and the somewhat more Kroger-like recent logo redesign there's little sign that it's a Kroger brand, although our old loyalty card phone number from Fred Meyer does seem to work on their systems.

It would make zero sense to introduce Kroger brand stores when there's already Safeway and Fred Meyer there plus QFC will remain under C&S. They already know the Kroger name has a poor reputation which is why they ruled out rebranding nationwide and decided on the dumb fruit cart initiative. Although Albertsons has the worst reputation there, many people do not like Kroger and perceive the name as having damaged the quality and reputation of Fred Meyer. I'm going to guess QFC was never well liked so that is neither here or there, but hanging a Kroger sign up there would be just as bad as an Albertsons sign. I suppose that if they couldn't rebrand as Fred Meyer thinking small format stores will confuse people then they could use Haggen, or Safeway.

I do not expect any substantial changes to Safeway or Albertsons store formats at all if Kroger succeeds in merging, rather all the changes will be back end - middle management consolidation, procurement, distribution, and house brands. They are planning so little investment in "improving" the ACI branded stores that I'm not sure they would even have enough money to do much past swap out all the IT and systems infrastructure in the acquired stores (that's expensive work) there's definitely no money planned to fully remodel anything which means at this time the most we might expect if they felt like unifying things is new paint and wall decor and aisle hangers without anything else. They're committing only a billion which includes system conversions for "improving" ACI owned stores. That probably means only the most aged and deteriorated locations will see any kind of capital expenditure; a billion spread across over 2000 stores is less than half a million per store. Assuming the usual plans where all network equipment, servers, etc. are pulled and replaced along with Scan guns and other equipment that is easily a couple of hundred thousand per store just to move to all Kroger systems (the really good technicians that do this work right are not cheap, and cheap technicians that do this work are not really good). Just the labor to theoretically reset all plano grams, shelf labels, etc. if they really wanted to make over all ACI stores into a Kroger format and now the remaining money is gone too without changing a sign or repainting anything. Based on the comically low stated investments and the allowed deterioration that is happening throughout the Kroger fleet lately I expect it will be many years, if not a decade plus before any ACI store is fully remodeled and the work will not be up to par. (Every time I visit my local Ralphs I find another new color of linoleum or vinyl plank has been introduced by a sloppy repair person, I think they're up to a couple dozen colors pieced in with plenty of duct tape holding the rest together and it has current Kroger decor)

[babs]

If I had to guess, I could see some of the nicer "core" QFC stores on the Eastside like the Downtown and Crossroads stores in Bellevue, Bella Bottega in Redmond, Kirkland Urban and possibly University Village, Mercer Street and Broadway Market (which could easily be rebranded to Fred Meyer) in Seattle that might be retained. Unlike Harris Teeter though, the QFC stores have been basically turned in to Kroger stores in all but name at this point, so unless they wanted to rebrand those to Safeway the most logical thing to do would to just brand them to Kroger and be done with it.

As for Harris Teeter, there's no Safeway/Albertsons stores in the majority of their territory so I don't expect much impact. Aside from a few Simple Truth products on the shelves and the somewhat more Kroger-like recent logo redesign there's little sign that it's a Kroger brand, although our old loyalty card phone number from Fred Meyer does seem to work on their systems.

I'm guessing they are going to keep the larger QFC stores and rename them as Fred Meyer Marketplace stores. They already look like mini Fred Meyer stores on the inside.

[storewanderer]

It would make zero sense to introduce Kroger brand stores when there's already Safeway and Fred Meyer there plus QFC will remain under C&S. They already know the Kroger name has a poor reputation which is why they ruled out rebranding nationwide and decided on the dumb fruit cart initiative. Although Albertsons has the worst reputation there, many people do not like Kroger and perceive the name as having damaged the quality and reputation of Fred Meyer. I'm going to guess QFC was never well liked so that is neither here or there, but hanging a Kroger sign up there would be just as bad as an Albertsons sign. I suppose that if they couldn't rebrand as Fred Meyer thinking small format stores will confuse people then they could use Haggen, or Safeway.

I do not expect any substantial changes to Safeway or Albertsons store formats at all if Kroger succeeds in merging, rather all the changes will be back end - middle management consolidation, procurement, distribution, and house brands. They are planning so little investment in "improving" the ACI branded stores that I'm not sure they would even have enough money to do much past swap out all the IT and systems infrastructure in the acquired stores (that's expensive work) there's definitely no money planned to fully remodel anything which means at this time the most we might expect if they felt like unifying things is new paint and wall decor and aisle hangers without anything else.

I think QFC had a better reputation before Fred Meyer and early in Kroger. QFC hasn't really opened a nice store or flagship store in well over a decade now. They basically seem to be running on fumes. They do have a few nicer stores in better parts of Seattle (Bellevue Square, University Village, one or two others that escape me) but most stores are not. The one like Vancouver-Camas is big and could be nice but it just isn't (it does have lower prices than most QFCs though) and is underwhelming and does lousy low volume (I think they could triple volume converting to Fred Meyer Marketplace and double volume converting to Safeway but the problem is that volume would probably just come from surrounding locations of those two chains...).

QFC used to be high priced but had higher quality products. The present day QFC seems to be high priced but have lousy quality products (I find their quality to be worse than Fred Meyer- I know they use the same warehouse- it doesn't make sense).

[ClownLoach]

If I had to guess, I could see some of the nicer "core" QFC stores on the Eastside like the Downtown and Crossroads stores in Bellevue, Bella Bottega in Redmond, Kirkland Urban and possibly University Village, Mercer Street and Broadway Market (which could easily be rebranded to Fred Meyer) in Seattle that might be retained. Unlike Harris Teeter though, the QFC stores have been basically turned in to Kroger stores in all but name at this point, so unless they wanted to rebrand those to Safeway the most logical thing to do would to just brand them to Kroger and be done with it.

As for Harris Teeter, there's no Safeway/Albertsons stores in the majority of their territory so I don't expect much impact. Aside from a few Simple Truth products on the shelves and the somewhat more Kroger-like recent logo redesign there's little sign that it's a Kroger brand, although our old loyalty card phone number from Fred Meyer does seem to work on their systems.

I'm guessing they are going to keep the larger QFC stores and rename them as Fred Meyer Marketplace stores. They already look like mini Fred Meyer stores on the inside.

Makes the most sense and lowest cost option, they won't need to do any remodeling or advertising to introduce a different brand as the customer will already understand what it is. I could see many situations where the QFC goes while the nearest Safeway/Albertsons stays. I also wonder if they're going to try to pretend that a full line Fred Meyer is somehow fundamentally different from a Safeway and thus justify keeping both as they're theoretically a different customer? That may be why the divest count is so low when Washington has the most overlaps anywhere between Kroger and ACI yet only 120 divests proposed... With a Safeway practically in every town. It's likely C&S isn't taking any of the Fred Meyer full line stores simply because it just wouldn't make any sense unless they were going to flip them to Walmart immediately; they would be clueless in how to merchandise a store of that size.

[storewanderer]

If I had to guess, I could see some of the nicer "core" QFC stores on the Eastside like the Downtown and Crossroads stores in Bellevue, Bella Bottega in Redmond, Kirkland Urban and possibly University Village, Mercer Street and Broadway Market (which could easily be rebranded to Fred Meyer) in Seattle that might be retained. Unlike Harris Teeter though, the QFC stores have been basically turned in to Kroger stores in all but name at this point, so unless they wanted to rebrand those to Safeway the most logical thing to do would to just brand them to Kroger and be done with it.

As for Harris Teeter, there's no Safeway/Albertsons stores in the majority of their territory so I don't expect much impact. Aside from a few Simple Truth products on the shelves and the somewhat more Kroger-like recent logo redesign there's little sign that it's a Kroger brand, although our old loyalty card phone number from Fred Meyer does seem to work on their systems.

I'm guessing they are going to keep the larger QFC stores and rename them as Fred Meyer Marketplace stores. They already look like mini Fred Meyer stores on the inside.

Makes the most sense and lowest cost option, they won't need to do any remodeling or advertising to introduce a different brand as the customer will already understand what it is. I could see many situations where the QFC goes while the nearest Safeway/Albertsons stays. I also wonder if they're going to try to pretend that a full line Fred Meyer is somehow fundamentally different from a Safeway and thus justify keeping both as they're theoretically a different customer? That may be why the divest count is so low when Washington has the most overlaps anywhere between Kroger and ACI yet only 120 divests proposed... With a Safeway practically in every town. It's likely C&S isn't taking any of the Fred Meyer full line stores simply because it just wouldn't make any sense unless they were going to flip them to Walmart immediately; they would be clueless in how to merchandise a store of that size.

It was announced that no Fred Meyer Stores are being divested at all anywhere. I expect a lot of QFC is getting divested but QFC only has 59 stores total.

Safeway has 184 stores in WA, Albertsons has 16 stores in WA, and Haggen has 15 stores. So basically half of Safeway/Albertsons is getting divested in WA. But there are fairly large geographic areas like Spokane or the Oregon Coast area where Fred Meyer has very low marketshare and Safeway/Albertsons has quite a few stores... where nothing is going to need to get divested.

[retailfanmitchell019]

Safeway has 184 stores in WA, Albertsons has 16 stores in WA, and Haggen has 15 stores. So basically half of Safeway/Albertsons is getting divested in WA. But there are fairly large geographic areas like Spokane or the Oregon Coast area where Fred Meyer has very low marketshare and Safeway/Albertsons has quite a few stores... where nothing is going to need to get divested.

As of the 2003 annual report, Albertsons had 84 stores in Washington. 20% of what they had 20 years ago. It’s sad how far they’ve fallen there… That’s all Supervalu’s fault for the reputation of the Albertsons name in Washington, as they let stores there deteriorate along with jacking up prices.
Of course Supervalu was sold to UNFI after the NAI failure. Example in business number 800 of “what goes around comes around”…

[storewanderer]

Safeway has 184 stores in WA, Albertsons has 16 stores in WA, and Haggen has 15 stores. So basically half of Safeway/Albertsons is getting divested in WA. But there are fairly large geographic areas like Spokane or the Oregon Coast area where Fred Meyer has very low marketshare and Safeway/Albertsons has quite a few stores... where nothing is going to need to get divested.

20 years ago, Albertsons had 84 stores in Washington. It’s sad how far they’ve fallen there… That’s all Supervalu’s fault for the reputation of the Albertsons name in Washington. Supervalu was sold to UNFI after the NAI failure. Example in business number 800 of “what goes around comes around”…

We haven't kept good counts but I am thinking about 15 Albertsons stores in WA have been converted to Safeway. Supervalu got what it deserved in WA. Those were some of the absolute worst run Albertsons stores. worst prices, they really screwed WA up back in that 2008-2012 period. SoCal was always run better by Supervalu...

What is even more strange about it is that WA was a territory Supervalu had a decent, profitable wholesale business in at the time they bought Albertsons. But losing WinCo's wholesale business (a direct result of them buying Albertsons) probably hurt pretty badly as that warehouse of Supervalu was the one responsible for the sales to WinCo.

[marshd1000]

It has been mentioned that some of the retained QFC's could be rebranded as Haggen. I think that could possibly work for stores like University Village, Mercer Street etc. But I am wondering if that could also backfire given the Haggen fiasco in terms of pricing and promotion of the stores when it came to the Safeway/Albertsons divestitures! But then again, Kroger probably could overcome that as they do know how to run large fleets of stores with different formats. One thing that hasn't been mentioned is the impact in Bellingham, Haggen's hometown. In Bellingham, there are 4 Haggen stores, 1 Safeway and 2 Fred Meyer stores. I can see C&S bringing QFC into Bellingham for the first time by converting the Safeway and the Sehome Village Haggen to QFC. I can't see them getting rid of Barkley Village, Fairhaven or Meridian Street. But if there were another Haggen to go, it could possibly be the Meridian store.