🛒 Kroger-Albertsons Merger: National Impact

[Bluelightspecial]

Awful take.

There aren't "so many options for groceries". Oh wow! Customers can just go to the dollar store instead! Yeah, no. What's next, considering 7-Eleven a competitor? Imagine if American Stores had tried to argue something similar in the 1980s when they bought Lucky.

Also, as far as competition you obviously haven't been paying attention. In the last 15 years there has been a huge decrease in Ralphs, Vons, & Albertsons.....but people aren't forced to shop at 7-11 as you sarcastically replied. How many Vons markets have converted to Jons markets. Ralphs used to own the San Fernando Valley and now I bet Vallarta does more business. Super King has some stores where Albertsons and Hughes used to be that probably do close to $2M a week. The eastern San Gabriel Valley is dominated by asian markets like Seafood King. Whole Foods, Ralphs,, Vons and Albertsons continue to fight over the same market share....but I would argue that there is more market competition than there was 15 years ago because of the proliferation of markets like Northgate, Vallarta, Super King, Trader Joes, Superior and others. And many of these are much nicer than the traditional stores. I went into a Vallarta that was recently built that had better perimeter departments and was better stocked than most Vons and Ralphs....

[pseudo3d]

Just my opinion, but judging from history, my opinion of this merger has changed 180 degrees. I think the merger should be allowed to go through with the amount of divestitures Kroger/Albertsons currently want. C&S may not fail as bad as the Haagan debacle, but it will fail. The simple answer is "demographics". The markets in the major urban areas are much more fragmented than even 10 years ago. For example, if this merger was never proposed think of how many Kroger and Albertsons stores would close in the next 5 years anyway and both chains know it. For some reference, when Vons bought the Safeway southern California division in the late 80s there were close to 400 stores. When Safeway bought it back there was I believe a little over 200 stores. Most, if not all, of the stores in the central valley of California were sold eventually to chains like Vallarta because Safeway/Vons didn't know how to market to that demographic. The same thing is happening in northern Orange County and Phoenix. Albertsons is so weak in Colorado and Houston they should just include all those stores in the "spinoff/sale". My point is that there are so many options for groceries and both chains are dinosaurs dying off already in some markets. If Kroger can merge and get some of the Albertsons gems like northern CA, and Hawaii (which makes more money than some divisions) I think they would be fine with it.

Awful take.

There aren't "so many options for groceries". Oh wow! Customers can just go to the dollar store instead! Yeah, no. What's next, considering 7-Eleven a competitor? Imagine if American Stores had tried to argue something similar in the 1980s when they bought Lucky.

Also, when Vons bought the Southern California division, according to the Los Angeles Times, store count for The Vons Cos. with Vons, Tianguis, Pavilions, and the soon-to-rebranded Safeway stores numbering "more than 350 stores", not "close to 400". When Safeway bought the remaining 65% of the company in 1997, there were 320 stores. That's over 30 stores, not 200.

I also think you're overestimating the importance of the Northern California Division. California is an extremely expensive to operate in, and the lackluster performance of Ralphs should indicate that they're not committed in California, and the smaller size of some of the NorCal stores is not Kroger's forte. Besides, if they wanted NorCal so badly, then just go for Save Mart. Likewise, in the case of Houston (can't speak for Colorado), most of the bad stores have been purged, and the remaining stores turn a small profit. They aren't a market leader by any stretch but that's not a bad thing. Besides, with H-E-B's growth in Houston (Kroger has done nothing) they now have a +4 lead on Kroger. Adding Randalls probably won't cannibalize Kroger but it can at least close that gap.

First off, before you disparage a comment know your facts. I have a list of all the Vons stores from 1991 after they bought the Safeway southern California division. It's over 400 stores. Perhaps you assumed that the LA times was referring to ALL of the southern California stores instead of of including San Diego and Central Valley. Yes Vons closed many stores after they bought the Safeway southern CA division, but in 1991 they still had more stores than you "guessed". Second, Yes Safeway NorCal is expensive to operate but they also have the volume to manage it. It also includes Hawaii which has higher volume per store than most other stores. So for your education, here is the list of stores in 1991 after Vons bought the Safeway SoCal division before. If you want a list of the stores that Safeway bought back I can send that to you also. So before you say something is "awful" you might want to do your homework.

All stores numbered 1 through 187 were originally Vons. From 190 to 463 were Safeways. Most of which have closed by now.
pseudo3d, if you'd like further proof I have it.

I do not know who compiled that list but it looks like it was composed of directories and other sources, which are often out of date, and you can see how some phone numbers are either acquired through third-party sources or disconnected.

I was not also, as you accuse me of doing "guessed". The number of combined Vons/Safeway stores is from this quote:

With the addition of the Safeway stores, Vons operates more than 350 stores under the names Vons, Tianguis and Pavilions. The combination will give Vons about $5 billion in annual sales.

In regards to the buyback, there are a few hints about Safeway's remaining stores:

Safeway, which operates 1,050 stores in California, Oregon, Washington and western Canada, currently owns 34.5 percent of Vons, a chain based in Arcadia, Calif.
The combined operations would have sales of more than $22.5 billion and 1,375 stores operating in 16 states, Washington, D.C., and Canada. The deal would cement Safeway's position as the No. 2 supermarket chain in the country, behind the Kroger Company of Cincinnati; Safeway is based in Pleasanton, Calif.

That article suggests 325 stores, and that's also mentioned in FundingUniverse, so where is this "a little over 200 stores" talk coming from? From your own post, you remembered incorrectly ("I believe a little over 200 stores") yet you accuse others of guessing?

Also, as far as competition you obviously haven't been paying attention. In the last 15 years there has been a huge decrease in Ralphs, Vons, & Albertsons.....but people aren't forced to shop at 7-11 as you sarcastically replied. How many Vons markets have converted to Jons markets. Ralphs used to own the San Fernando Valley and now I bet Vallarta does more business. Super King has some stores where Albertsons and Hughes used to be that probably do close to $2M a week. The eastern San Gabriel Valley is dominated by asian markets like Seafood King. Whole Foods, Ralphs,, Vons and Albertsons continue to fight over the same market share....but I would argue that there is more market competition than there was 15 years ago because of the proliferation of markets like Northgate, Vallarta, Super King, Trader Joes, Superior and others. And many of these are much nicer than the traditional stores. I went into a Vallarta that was recently built that had better perimeter departments and was better stocked than most Vons and Ralphs....

Even if you came up with a compelling argument why its not so bad for Southern California (and its true that the strike twenty years ago did get the ball rolling on non-union non-"traditional" stores), that doesn't change things for the rest of the country.

[Bluelightspecial]

Who compiled the list? It was the LECs (Local Exchange Carriers)for the phone companies. Remember the Safeway SoCal division, at the end, included SanDiego, Las Vegas, and the entire central valley and coast of California. If you are suggesting the list I provided is wrong I have the initial list from the Vons buyout of the Safeway division as well as a list of the stores when Safeway bought Vons in the late 90's. I have store list receipts from 1988, 1991, 1997 and 2000. You don't apparently

[storewanderer]

Who compiled the list? It was the LECs (Local Exchange Carriers)for the phone companies. Remember the Safeway SoCal division, at the end, included SanDiego, Las Vegas, and the entire central valley and coast of California. If you are suggesting the list I provided is wrong I have the initial list from the Vons buyout of the Safeway division as well as a list of the stores when Safeway bought Vons in the late 90's. I have store list receipts from 1988, 1991, 1997 and 2000. You don't apparently

That is an interesting list- am I seeing it right that Safeway only had 3 stores in the entire Las Vegas market when Vons bought it? I am surprised it was even worth their while to bother with 3 stores in that market. Then again Las Vegas was a much smaller place in the early 90's.

Vons/Pavilions was definitely at 325 stores (including Fresno/Las Vegas) when Safeway bought it back. I think there was a store overlap somewhere in the middle of the state- I do not know where. It wasn't Fresno as NorCal Safeway dumped its two junk stores off there and the busy Pak N Save off to Save Mart around 1995. The rumor I heard was some Safeway was rebranded to Vons in the late 90's, but I never figured out where or if that was actually true. I assumed it was somewhere around the Central Coast but never could figure it out.

As you point out all those non union grocers are taking over SoCal. Superior keeps opening stores. Smart & Final keeps opening. These non union operators have very aggressive expansion plans and the customers favor them. But while the merger may be okay overall for SoCal, it is not so okay for places like Colorado, Oregon, Washington, Nevada, Arizona, etc. And for me that is enough to form my opinion against it. Also I think there are still pockets in SoCal where those other chains you describe aren't, and those areas are still micro markets dominated by these chains...

[pseudo3d]

Who compiled the list? It was the LECs (Local Exchange Carriers)for the phone companies. Remember the Safeway SoCal division, at the end, included SanDiego, Las Vegas, and the entire central valley and coast of California. If you are suggesting the list I provided is wrong I have the initial list from the Vons buyout of the Safeway division as well as a list of the stores when Safeway bought Vons in the late 90's. I have store list receipts from 1988, 1991, 1997 and 2000. You don't apparently

Again, though, these lists tend to be a few years out of date, and I don't appreciate you calling me a liar because you undershot the number of Vons stores in 1997 by over 100. But I digress.

In terms of the merger, with C&S getting the rights to the Albertsons name in a few parts of the country, why not just divest Albertsons entirely?

Here me out: the idea currently is that C&S is getting only the trash locations and not running a complete or viable chain. If they divest Albertsons in its entirety as a separate company, then it essentially is closer to what it was pre-1999, a chain that goes under ONE name. In Idaho, they keep their stores (including Albertsons Market Street) while Kroger keeps Fred Meyer, Arizona is solved (possibly getting new Safeway stores that Kroger couldn't keep), Colorado would be reverting stores back to Albertsons anyway, Louisiana is solved, and Dallas keeps Albertsons and Tom Thumb (since Kroger already exists). Albertsons also keeps United Supermarkets and reverts back to pre-2014 by leaving NorCal, Alaska, and so forth. Essentially, if they kept just United Supermarkets, and Tom Thumb/Randalls, they still leave a functional supermarket chain behind. Kroger still gets Safeway NorCal, Jewel-Osco, and the Northeast locations.

[veteran+]

Awful take.

There aren't "so many options for groceries". Oh wow! Customers can just go to the dollar store instead! Yeah, no. What's next, considering 7-Eleven a competitor? Imagine if American Stores had tried to argue something similar in the 1980s when they bought Lucky.

Also, as far as competition you obviously haven't been paying attention. In the last 15 years there has been a huge decrease in Ralphs, Vons, & Albertsons.....but people aren't forced to shop at 7-11 as you sarcastically replied. How many Vons markets have converted to Jons markets. Ralphs used to own the San Fernando Valley and now I bet Vallarta does more business. Super King has some stores where Albertsons and Hughes used to be that probably do close to $2M a week. The eastern San Gabriel Valley is dominated by asian markets like Seafood King. Whole Foods, Ralphs,, Vons and Albertsons continue to fight over the same market share....but I would argue that there is more market competition than there was 15 years ago because of the proliferation of markets like Northgate, Vallarta, Super King, Trader Joes, Superior and others. And many of these are much nicer than the traditional stores. I went into a Vallarta that was recently built that had better perimeter departments and was better stocked than most Vons and Ralphs....

Just a side note from my perspective and perhaps others as well (or not):

".but I would argue that there is more market competition than there was 15 years ago because of the proliferation of markets like Northgate, Vallarta, Super King, Trader Joes, Superior and others."

That's not for me. I don't consider those to be options for several reasons but I get your point. I would argue though that traditional "Supermarket" competition has declined.

[Bluelightspecial]

Who compiled the list? It was the LECs (Local Exchange Carriers)for the phone companies. Remember the Safeway SoCal division, at the end, included SanDiego, Las Vegas, and the entire central valley and coast of California. If you are suggesting the list I provided is wrong I have the initial list from the Vons buyout of the Safeway division as well as a list of the stores when Safeway bought Vons in the late 90's. I have store list receipts from 1988, 1991, 1997 and 2000. You don't apparently

This list is from 1991 which was a few years after Vons bought the Safeway division. Vons closed most of the Safeway Las Vegas stores by 1991, but they had their own stores there also. Interesting fact, there is still one of the older Safeway stores operating as a Vons left. It was probably the smallest, but right across the street from the university.

[Bluelightspecial]

Again, though, these lists tend to be a few years out of date, and I don't appreciate you calling me a liar because you undershot the number of Vons stores in 1997 by over 100. But I digress.

In terms of the merger, with C&S getting the rights to the Albertsons name in a few parts of the country, why not just divest Albertsons entirely?

Here me out: the idea currently is that C&S is getting only the trash locations and not running a complete or viable chain. If they divest Albertsons in its entirety as a separate company, then it essentially is closer to what it was pre-1999, a chain that goes under ONE name. In Idaho, they keep their stores (including Albertsons Market Street) while Kroger keeps Fred Meyer, Arizona is solved (possibly getting new Safeway stores that Kroger couldn't keep), Colorado would be reverting stores back to Albertsons anyway, Louisiana is solved, and Dallas keeps Albertsons and Tom Thumb (since Kroger already exists). Albertsons also keeps United Supermarkets and reverts back to pre-2014 by leaving NorCal, Alaska, and so forth. Essentially, if they kept just United Supermarkets, and Tom Thumb/Randalls, they still leave a functional supermarket chain behind. Kroger still gets Safeway NorCal, Jewel-Osco, and the Northeast locations.
[/quote]

First off, I didn't call you a liar, and if it was interpreted that way then I apologize. I suggested you didn't have all the facts. However the list I provided was from 1991 not 1997 and Vons had closed a number of stores between those years when Safeway bought the Vons stores back. There were a lot more Vons stores when they bought the Safeway division than when it was bought back in 1997. Also, Vons already had stores in the central valley and Fresno before the Safeway buyout.

[storewanderer]

Again, though, these lists tend to be a few years out of date, and I don't appreciate you calling me a liar because you undershot the number of Vons stores in 1997 by over 100. But I digress.

In terms of the merger, with C&S getting the rights to the Albertsons name in a few parts of the country, why not just divest Albertsons entirely?

Here me out: the idea currently is that C&S is getting only the trash locations and not running a complete or viable chain. If they divest Albertsons in its entirety as a separate company, then it essentially is closer to what it was pre-1999, a chain that goes under ONE name. In Idaho, they keep their stores (including Albertsons Market Street) while Kroger keeps Fred Meyer, Arizona is solved (possibly getting new Safeway stores that Kroger couldn't keep), Colorado would be reverting stores back to Albertsons anyway, Louisiana is solved, and Dallas keeps Albertsons and Tom Thumb (since Kroger already exists). Albertsons also keeps United Supermarkets and reverts back to pre-2014 by leaving NorCal, Alaska, and so forth. Essentially, if they kept just United Supermarkets, and Tom Thumb/Randalls, they still leave a functional supermarket chain behind. Kroger still gets Safeway NorCal, Jewel-Osco, and the Northeast locations.

First off, I didn't call you a liar, and if it was interpreted that way then I apologize. I suggested you didn't have all the facts. However the list I provided was from 1991 not 1997 and Vons had closed a number of stores between those years when Safeway bought the Vons stores back. There were a lot more Vons stores when they bought the Safeway division than when it was bought back in 1997. Also, Vons already had stores in the central valley and Fresno before the Safeway buyout.
[/quote]

Vons competed with NorCal Safeway in Fresno area; Safeway also had stores in Selma and a couple other random places down that way which were shifted to independents; Scolaris bought 2 of them Hanford and Corcoran and didn't operate them directly long but they were moved to Cost Less and are still open as Cost Less and still have (repainted) Safeway interiors. The Selma Store was held somewhat longer by Safeway than those other two but eventually was sold and when sold was also called "Selma Cost Less" but it was never involved with Scolaris or the Cost Less chain that was created out of those 2 former Scolaris units mentioned above, and also retained a Safeway interior, but eventually closed for some reason. Groceteria has photos of that Selma Cost Less.

[pseudo3d]

More evidence in Oregon was "fierce competition" between Fred Meyer and Safeway.

FTC needs to come down with the hammer on divestments, lose Fred Meyer and the other Fred Meyer banners or lose Albertsons (and give them stores in WA/OR).