🛒 Kroger-Albertsons Merger: National Impact

[marketreportblog]

Going up to New England, one factor is the future of Shaw's/Star Market. I suspect Wakefern/ShopRite would buy those. Shaw's is one of the weaker Albertsons divisions.

Not sure Wakefern wants much of Shaw's/Star Market. I have to assume they don't want stores in Maine, New Hampshire, or Vermont, and as for the Massachusetts/Rhode Island stores, it's possible Wakefern could be interested but they seem to be tentative about those areas via Price Rite. They've closed some of the MA/RI Price Rites recently. Plus, I just can't imagine Wakefern integrating 150 stores in regions they've never been in before. Who would own them?

[pseudo3d]

There were no problems with Albertsons in Florida. Everyone I visited were clean, modern, well staffed and well run.

The "problem" was they did not have enough stores to make a difference and for some reason would not build more stores. I think they would have taken W/D to the cleaners IF they had the will to do it.

I believe they would have easily bested Publix on price. The other "problem" was time ($$$$) to build critical mass.

Exactly. They couldn't afford to do much with anything after ASC, and unlike their Dallas-Fort Worth or Austin operations, didn't have any acquisitions to speed up the process (other than the Jewel-Osco Florida stores, which weren't a great fit).

[wnetmacman]

There were no problems with Albertsons in Florida. Everyone I visited were clean, modern, well staffed and well run.

The "problem" was they did not have enough stores to make a difference and for some reason would not build more stores. I think they would have taken W/D to the cleaners IF they had the will to do it.

I believe they would have easily bested Publix on price. The other "problem" was time ($$$$) to build critical mass.

Florida is a long, long way from Boise. That was one problem, the lack of the willingness to compete was another. They had the infrastructure with the Plant City DC, but that itself is deep in Publix territory.

A first grader with crayons could have taken down Winn Dixie.

[pseudo3d]

There were no problems with Albertsons in Florida. Everyone I visited were clean, modern, well staffed and well run.

The "problem" was they did not have enough stores to make a difference and for some reason would not build more stores. I think they would have taken W/D to the cleaners IF they had the will to do it.

I believe they would have easily bested Publix on price. The other "problem" was time ($$$$) to build critical mass.

Florida is a long, long way from Boise. That was one problem, the lack of the willingness to compete was another. They had the infrastructure with the Plant City DC, but that itself is deep in Publix territory.

A first grader with crayons could have taken down Winn Dixie.

Albertsons came to Florida when Skaggs Albertsons split in the late 1970s, and the Plant City warehouse wasn't built until the mid-1990s. The thing is, Albertsons was the most successful out of market competitor to arrive in Florida. Grand Union, A&P, and Kroger were also trying to get into Florida in the 1980s, and Albertsons outlasted them all.

But again, Albertsons could neither benefit from a big acquisition in the area, nor had the resources post-1999 to keep up the pace like it needed.

[BillyGr]

Not sure Wakefern wants much of Shaw's/Star Market. I have to assume they don't want stores in Maine, New Hampshire, or Vermont, and as for the Massachusetts/Rhode Island stores, it's possible Wakefern could be interested but they seem to be tentative about those areas via Price Rite. They've closed some of the MA/RI Price Rites recently. Plus, I just can't imagine Wakefern integrating 150 stores in regions they've never been in before. Who would own them?

They could be a help IF someone wanted to buy the stores but needed an affiliation, being they offer their name/branding to members as well as the corporate run stores.

Not that that solves the who, but would allow for it to be more than one who (that is, smaller companies splitting in different areas).

Giant-PA and Hannaford also aren't union, the problem with Food Lion is their stores are small and not full-featured. They can also stand up on their own (over 1000 units) and have been improving in recent years.

That's not actually a problem, more of the way the chain was founded and has been run ever since (keeping the stores smaller, focusing on groceries and not all the stuff that most chains do.
Not exactly the way Aldi does it, but a bit closer to their setup, which has obviously worked fairly well for them for the many decades they have been around

[veteran+]

There were no problems with Albertsons in Florida. Everyone I visited were clean, modern, well staffed and well run.

The "problem" was they did not have enough stores to make a difference and for some reason would not build more stores. I think they would have taken W/D to the cleaners IF they had the will to do it.

I believe they would have easily bested Publix on price. The other "problem" was time ($$$$) to build critical mass.

Florida is a long, long way from Boise. That was one problem, the lack of the willingness to compete was another. They had the infrastructure with the Plant City DC, but that itself is deep in Publix territory.

A first grader with crayons could have taken down Winn Dixie.

Albertsons came to Florida when Skaggs Albertsons split in the late 1970s, and the Plant City warehouse wasn't built until the mid-1990s. The thing is, Albertsons was the most successful out of market competitor to arrive in Florida. Grand Union, A&P, and Kroger were also trying to get into Florida in the 1980s, and Albertsons outlasted them all.

But again, Albertsons could neither benefit from a big acquisition in the area, nor had the resources post-1999 to keep up the pace like it needed.

Are you saying that Grand Union and A&P were trying to come back to Florida? Because they were pretty entrenched in Florida at one time unlike Kroger.

[pseudo3d]

Florida is a long, long way from Boise. That was one problem, the lack of the willingness to compete was another. They had the infrastructure with the Plant City DC, but that itself is deep in Publix territory.

A first grader with crayons could have taken down Winn Dixie.

Albertsons came to Florida when Skaggs Albertsons split in the late 1970s, and the Plant City warehouse wasn't built until the mid-1990s. The thing is, Albertsons was the most successful out of market competitor to arrive in Florida. Grand Union, A&P, and Kroger were also trying to get into Florida in the 1980s, and Albertsons outlasted them all.

But again, Albertsons could neither benefit from a big acquisition in the area, nor had the resources post-1999 to keep up the pace like it needed.

Are you saying that Grand Union and A&P were trying to come back to Florida? Because they were pretty entrenched in Florida at one time unlike Kroger.

A&P operated a 55k square foot food and drug chain in the Southeast called The Family Mart in the 1980s and attempted to re-enter Florida after leaving in the 1970s (link). When they left, Kroger bought them all and converted to Florida Choice, though Kroger left within a year or two. Grand Union on the other hand, was building stores into the early 1980s but was closing more than they opened by that time.

[wnetmacman]

A&P operated a 55k square foot food and drug chain in the Southeast called The Family Mart in the 1980s and attempted to re-enter Florida after leaving in the 1970s (link). When they left, Kroger bought them all and converted to Florida Choice, though Kroger left within a year or two. Grand Union on the other hand, was building stores into the early 1980s but was closing more than they opened by that time.

Neither The Family Mart or Florida Choice were successful. TFM was trying to grasp at straws to keep A&P alive in Atlanta and points south; as we all know, A&P holds the record (though Sears/Kmart is rapidly approaching) for the longest protracted Going Out of Business sale of any company (1975-2015). There were only 18 stores left when A&P pulled the plug in 1987.

Florida Choice represented a move away from where Kroger was at the time - they just couldn't make the stores work. If they tried today, the enormity of the stores may fit in with the Marketplace, but who knows. All of them did not come from A&P, as Kroger had built a few in 1986 prior to A&P pulling out, and some were converted SuperX Drugs. They were gone by 1988. During this same timeframe, Kroger had several Welcome warehouse stores, including at least one in Jacksonville; these also did not succeed.

Grand Union had its own internal issues.

[veteran+]

I did not see any of this A&P or Grand Union activity in the SW area of Florida. When they were gone they stayed gone in that area.

[pseudo3d]

A&P operated a 55k square foot food and drug chain in the Southeast called The Family Mart in the 1980s and attempted to re-enter Florida after leaving in the 1970s (link). When they left, Kroger bought them all and converted to Florida Choice, though Kroger left within a year or two. Grand Union on the other hand, was building stores into the early 1980s but was closing more than they opened by that time.

Neither The Family Mart or Florida Choice were successful. TFM was trying to grasp at straws to keep A&P alive in Atlanta and points south; as we all know, A&P holds the record (though Sears/Kmart is rapidly approaching) for the longest protracted Going Out of Business sale of any company (1975-2015). There were only 18 stores left when A&P pulled the plug in 1987.

Florida Choice represented a move away from where Kroger was at the time - they just couldn't make the stores work. If they tried today, the enormity of the stores may fit in with the Marketplace, but who knows. All of them did not come from A&P, as Kroger had built a few in 1986 prior to A&P pulling out, and some were converted SuperX Drugs. They were gone by 1988. During this same timeframe, Kroger had several Welcome warehouse stores, including at least one in Jacksonville; these also did not succeed.

Grand Union had its own internal issues.

I think A&P could've had a chance at survival had it not bought Pathmark after the cuts and sales in 2007.

This whole conversation started at the separate choices Albertsons and Kroger might take or could've taken after the merger, and I disagree with the prospect that a Florida entrance could've only come with a combined company--if the merger consummates, forget about ANY organic expansion for a long time! Would Kroger and Albertsons even last until the next trial?

FACT: Albertsons and Kroger have not filed any formal countersuit.
FACT: Albertsons and Kroger have not made any contingency plans to create alternate divestment partners.
FACT: Kroger's earning reports assume no merger.
FACT: There are a bunch of suits against states that Albertsons/Kroger still has to face.
FACT: The sooner they drop the merger, they drop the suits pending against them.