I wonder if they're making changes to the store banner mix to make it easier for C&S? So for example in California make it mostly Albertsons branded stores that go to C&S if they were choosing between unloading a Ralphs or a Vons or an Albertsons in a particular neighborhood? Obviously they've decided the Albertsons name is more popular in Arizona than Safeway? That's odd too. I'm not even sure if this list is at all accurate, as I find it hard to believe that they would remove any store from the original list and replace it with another on the second list.
The Kroger press release doesn't even have the rigorous fight language of their previous PR, it just says they're going to go through the process to try to help the merger go through so that we all see the "benefits" of it. This is the minimum amount of effort to perform due diligence in attempting to combat the lawsuits etc. And I have to think this ends with the merger being stopped by an injunction, Kroger stating there is no path forward, Kroger refusing to pay the break up fee, and Kroger vs Albertsons lawsuits flying over the break up fee.
I think the #1 reason for this entire exercise is PR, the overwhelming public perception is that the merger is dead and they decided to quickly get some news together and remind shareholders "HEY! We aren't done yet!" and that's about it.
That "new list" came directly from the Kroger website so I think it is accurate?
I think their bluff is being called on the idea that converting a bunch of Safeway units in AZ/CO to the Albertsons banner makes any sense. So they throw C&S a bone there and let them use the Safeway name and also not go through the cost of banner changes.
I think Kroger knows this merger is in question at the corporate level. They have picked up remodels and new stores again during 2024 in various markets with overlap and basically said from a capex perspective they are operating as if no merger is occurring.
Albertsons on the other hand I am not quite sure. What I think internally and at the division level and lower is the Albertsons people are working as if the merger isn't happening and continuing to push stronger operations and competitive promotions to try to compete more effectively against Kroger. But at the corporate level I am not sure where Albertsons is it on the merger, it feels like their corporate level is just "watching the store" waiting for the merger to close.
To be clear, when I say accurate I mean well thought out, thoroughly deliberated. I don't believe that is the case. In fact I am still not convinced that they even have final lists of stores internally after this. They're acting very high level and we've seen when this garbage happens - we get the disastrous Haggen type deal where they have to sell XX specific stores plus sell XYZ stores anywhere... They make terrible decisions as to what stores are kept vs go. Usually the lesser populated suburbs and such get disproportionate divestiture reducing choice dramatically. My guess is they started with a list of "must go" stores that they would close with the merger if divestitures weren't required, and their goal remains to have as many of those "must go" stores fall into the hands of C&S while they release as few of the "want to keep" stores as possible.
The fact that they still have not disclosed store lists, or even offered counts by county indicates that they're trying to keep it fluid deliberately to always work out the best possible deal for themselves.
ClownLoach wrote: ↑April 22nd, 2024, 1:58 pm
To be clear, when I say accurate I mean well thought out, thoroughly deliberated. I don't believe that is the case. In fact I am still not convinced that they even have final lists of stores internally after this. They're acting very high level and we've seen when this garbage happens - we get the disastrous Haggen type deal where they have to sell XX specific stores plus sell XYZ stores anywhere... They make terrible decisions as to what stores are kept vs go. Usually the lesser populated suburbs and such get disproportionate divestiture reducing choice dramatically. My guess is they started with a list of "must go" stores that they would close with the merger if divestitures weren't required, and their goal remains to have as many of those "must go" stores fall into the hands of C&S while they release as few of the "want to keep" stores as possible.
The fact that they still have not disclosed store lists, or even offered counts by county indicates that they're trying to keep it fluid deliberately to always work out the best possible deal for themselves.
Do you think it is possible C&S has advisors who are asking tougher questions? This may explain the banner flip to give them Safeway banner in CO/AZ.
For instance I wonder if in CA they tried to push off 66 "junk" stores as you describe including some lousy Ralphs/F4L Stores but now they are going to instead get 63 "better" stores and the junk Ralphs/F4L Stores fall off the list...
But in the case of ID/NM I can't see how the divests fall by 3 stores... there is nothing going on in ID/NM, no new competition has announced they are coming to my knowledge so why would divests be fewer, maybe because those two states do not care. NM should care given the depressed condition of that state and ID should care since they're losing a corporate headquartered company. NM has suffered loss of grocery competition for years with the demise of chains like Furrs and Raleys and has not seen new entrants like WinCo come in to help the situation.
ClownLoach wrote: ↑April 22nd, 2024, 1:58 pm
To be clear, when I say accurate I mean well thought out, thoroughly deliberated. I don't believe that is the case. In fact I am still not convinced that they even have final lists of stores internally after this. They're acting very high level and we've seen when this garbage happens - we get the disastrous Haggen type deal where they have to sell XX specific stores plus sell XYZ stores anywhere... They make terrible decisions as to what stores are kept vs go. Usually the lesser populated suburbs and such get disproportionate divestiture reducing choice dramatically. My guess is they started with a list of "must go" stores that they would close with the merger if divestitures weren't required, and their goal remains to have as many of those "must go" stores fall into the hands of C&S while they release as few of the "want to keep" stores as possible.
The fact that they still have not disclosed store lists, or even offered counts by county indicates that they're trying to keep it fluid deliberately to always work out the best possible deal for themselves.
Do you think it is possible C&S has advisors who are asking tougher questions? This may explain the banner flip to give them Safeway banner in CO/AZ.
For instance I wonder if in CA they tried to push off 66 "junk" stores as you describe including some lousy Ralphs/F4L Stores but now they are going to instead get 63 "better" stores and the junk Ralphs/F4L Stores fall off the list...
But in the case of ID/NM I can't see how the divests fall by 3 stores... there is nothing going on in ID/NM, no new competition has announced they are coming to my knowledge so why would divests be fewer, maybe because those two states do not care. NM should care given the depressed condition of that state and ID should care since they're losing a corporate headquartered company. NM has suffered loss of grocery competition for years with the demise of chains like Furrs and Raleys and has not seen new entrants like WinCo come in to help the situation.
I'm not sure when C&S basically advertised itself as "the means to an end" for previous merger transactions, not much different than Tiger or Hilco or another liquidator. I do wonder if they initiated some change after maybe shopping around what they would have been receiving. I know for example of a toilet quality Vons that definitely had a "buyer representative" walking the store shortly before the C&S deal was publicly announced. Maybe they have identified lumps of stores they can flip to a competitor and as such requested changes to the list? Also now makes me wonder when you see California now only dropping ACI stores if they are playing a sneaky game, since they must not feel the force of the CA AG lawsuit quite like others... Makes me wonder if they are going to try to do what I said and divest just to reach a number which will mean getting rid of lower volume rural and suburban stores while trying to keep more high volume urban stores even if it reduces competition there? Trying to maybe keep every store in the LA area and so on as they're the highest volume and most profitable?
There is a real reason or two why there is no public list. They obviously are playing games here to try to benefit themselves and continue to make a joke of the divestiture program. I think all of this will only result in an even more aggressive injunction when it inevitably arrives.
ClownLoach wrote: ↑April 22nd, 2024, 1:58 pm
To be clear, when I say accurate I mean well thought out, thoroughly deliberated. I don't believe that is the case. In fact I am still not convinced that they even have final lists of stores internally after this. They're acting very high level and we've seen when this garbage happens - we get the disastrous Haggen type deal where they have to sell XX specific stores plus sell XYZ stores anywhere... They make terrible decisions as to what stores are kept vs go. Usually the lesser populated suburbs and such get disproportionate divestiture reducing choice dramatically. My guess is they started with a list of "must go" stores that they would close with the merger if divestitures weren't required, and their goal remains to have as many of those "must go" stores fall into the hands of C&S while they release as few of the "want to keep" stores as possible.
The fact that they still have not disclosed store lists, or even offered counts by county indicates that they're trying to keep it fluid deliberately to always work out the best possible deal for themselves.
Do you think it is possible C&S has advisors who are asking tougher questions? This may explain the banner flip to give them Safeway banner in CO/AZ.
For instance I wonder if in CA they tried to push off 66 "junk" stores as you describe including some lousy Ralphs/F4L Stores but now they are going to instead get 63 "better" stores and the junk Ralphs/F4L Stores fall off the list...
But in the case of ID/NM I can't see how the divests fall by 3 stores... there is nothing going on in ID/NM, no new competition has announced they are coming to my knowledge so why would divests be fewer, maybe because those two states do not care. NM should care given the depressed condition of that state and ID should care since they're losing a corporate headquartered company. NM has suffered loss of grocery competition for years with the demise of chains like Furrs and Raleys and has not seen new entrants like WinCo come in to help the situation.
I'm not sure when C&S basically advertised itself as "the means to an end" for previous merger transactions, not much different than Tiger or Hilco or another liquidator. I do wonder if they initiated some change after maybe shopping around what they would have been receiving. I know for example of a toilet quality Vons that definitely had a "buyer representative" walking the store shortly before the C&S deal was publicly announced. Maybe they have identified lumps of stores they can flip to a competitor and as such requested changes to the list? Also now makes me wonder when you see California now only dropping ACI stores if they are playing a sneaky game, since they must not feel the force of the CA AG lawsuit quite like others... Makes me wonder if they are going to try to do what I said and divest just to reach a number which will mean getting rid of lower volume rural and suburban stores while trying to keep more high volume urban stores even if it reduces competition there? Trying to maybe keep every store in the LA area and so on as they're the highest volume and most profitable?
There is a real reason or two why there is no public list. They obviously are playing games here to try to benefit themselves and continue to make a joke of the divestiture program. I think all of this will only result in an even more aggressive injunction when it inevitably arrives.
It's hard for me to see how Albertsons and Kroger thought this new deal would entice the FTC any better. I know someone said maybe it was simply to get the states that were suing off their backs, but the FTC was very clear that C&S is simply a questionable buyer, and it's going to take actual legit regional supermarket operators as the divest buyers to even remotely sway the FTC into considering the deal.
Perhaps the companies themselves think the merger may not happen, they just want to appease the press, as well as hold their ends of the deal without financial consequences from backing out until the FTC officially breaks apart the merger.
Honestly, in terms of Albertsons, they would honestly be better off as their own company anyways, even if they choose to sell off some of their weaker assets when this deal doesn't go through.
It's hard for me to see how Albertsons and Kroger thought this new deal would entice the FTC any better. I know someone said maybe it was simply to get the states that were suing off their backs, but the FTC was very clear that C&S is simply a questionable buyer, and it's going to take actual legit regional supermarket operators as the divest buyers to even remotely sway the FTC into considering the deal.
Perhaps the companies themselves think the merger may not happen, they just want to appease the press, as well as hold their ends of the deal without financial consequences from backing out until the FTC officially breaks apart the merger.
Honestly, in terms of Albertsons, they would honestly be better off as their own company anyways, even if they choose to sell off some of their weaker assets when this deal doesn't go through.
I think the idea is to get CO and AZ off their backs by saying look we are basically divesting 80%+ of Albertsons/Safeway in your states - what more do you AGs want us to do? We are basically not "merging" in your state. And yes, that is true, the problem is the Albertsons/Safeway Stores end up in the hands of an operator that has a lot of questions as to if they can survive or not.
Let's take this a step further. If they announced the buyer for CO and/or AZ was going to be Raleys, Save Mart, Ahold, Stater, AWG, or some other established party- how would people's opinions change on this merger?
I actually think selling more stores to C&S makes things even worse... it will make the failure of C&S operated stores, if they fail in the manner Haggen did, even more devastating to more employees/neighborhoods.
I assume those stores in AZ and CO include the Albertsons/Safeway warehouses and truck fleets-they would just be duplicate facilities for Kroger in those markets.
It's hard for me to see how Albertsons and Kroger thought this new deal would entice the FTC any better. I know someone said maybe it was simply to get the states that were suing off their backs, but the FTC was very clear that C&S is simply a questionable buyer, and it's going to take actual legit regional supermarket operators as the divest buyers to even remotely sway the FTC into considering the deal.
Perhaps the companies themselves think the merger may not happen, they just want to appease the press, as well as hold their ends of the deal without financial consequences from backing out until the FTC officially breaks apart the merger.
Honestly, in terms of Albertsons, they would honestly be better off as their own company anyways, even if they choose to sell off some of their weaker assets when this deal doesn't go through.
I think the idea is to get CO and AZ off their backs by saying look we are basically divesting 80%+ of Albertsons/Safeway in your states - what more do you AGs want us to do? We are basically not "merging" in your state. And yes, that is true, the problem is the Albertsons/Safeway Stores end up in the hands of an operator that has a lot of questions as to if they can survive or not.
Let's take this a step further. If they announced the buyer for CO and/or AZ was going to be Raleys, Save Mart, Ahold, Stater, AWG, or some other established party- how would people's opinions change on this merger?
I actually think selling more stores to C&S makes things even worse... it will make the failure of C&S operated stores, if they fail in the manner Haggen did, even more devastating to more employees/neighborhoods.
I think in Arizona if they named Raley's as the buyer instead of C&S there would still be pushback because of their ownership of Bashas.
The fact is that Arizona, especially Phoenix, was one of the most over-stored markets in America for several decades. Now they're having to deal with the deteriorating dead malls and white space all over the place. They know that the store count of Kroger and Albertsons is too high, and realistically they could clean up the Frys division and probably close 80% of the Albertsons owned stores, absorbing their business almost entirely. The only thing that keeps all these stores open is intense competition to battle for the customer otherwise they would have done mass culling of stores as they did in SoCal over the last 15 years.
So the state is trying desperately to prolong the inevitable, which is a mass purge of grocery stores that wipes a hundred or so stores off the map in the greater Phoenix metroplex. They know what this will do for property taxes and employment. C&S is almost a guarantee that purge of stores would happen as they inevitably crash and burn taking down this hundred stores with them. But I don't see them being open to letting this merger happen in any fashion, and I also think that they will be proven to be making a big mistake in trying to get C&S to operate more stores. I do have to assume that they chose to license the Safeway name because they must intend to rebrand all the kept locations as Frys... That would eliminate the Albertsons name from all Kroger owned operations in California and Arizona presuming the merger went through. There is no reason to rebrand kept Safeway stores as Albertsons when they're going to have to be taking down Albertsons signs just over the state line in California, and that also makes me wonder if they are going to make the mistake of rebranding all kept Albertsons as Ralphs in SoCal. Clearly the banner strategy has changed based on the shifting store counts.
It's hard for me to see how Albertsons and Kroger thought this new deal would entice the FTC any better. I know someone said maybe it was simply to get the states that were suing off their backs, but the FTC was very clear that C&S is simply a questionable buyer, and it's going to take actual legit regional supermarket operators as the divest buyers to even remotely sway the FTC into considering the deal.
Perhaps the companies themselves think the merger may not happen, they just want to appease the press, as well as hold their ends of the deal without financial consequences from backing out until the FTC officially breaks apart the merger.
Honestly, in terms of Albertsons, they would honestly be better off as their own company anyways, even if they choose to sell off some of their weaker assets when this deal doesn't go through.
I think the idea is to get CO and AZ off their backs by saying look we are basically divesting 80%+ of Albertsons/Safeway in your states - what more do you AGs want us to do? We are basically not "merging" in your state. And yes, that is true, the problem is the Albertsons/Safeway Stores end up in the hands of an operator that has a lot of questions as to if they can survive or not.
Let's take this a step further. If they announced the buyer for CO and/or AZ was going to be Raleys, Save Mart, Ahold, Stater, AWG, or some other established party- how would people's opinions change on this merger?
I actually think selling more stores to C&S makes things even worse... it will make the failure of C&S operated stores, if they fail in the manner Haggen did, even more devastating to more employees/neighborhoods.
I think in Arizona if they named Raley's as the buyer instead of C&S there would still be pushback because of their ownership of Bashas.
The fact is that Arizona, especially Phoenix, was one of the most over-stored markets in America for several decades. Now they're having to deal with the deteriorating dead malls and white space all over the place. They know that the store count of Kroger and Albertsons is too high, and realistically they could clean up the Frys division and probably close 80% of the Albertsons owned stores, absorbing their business almost entirely. The only thing that keeps all these stores open is intense competition to battle for the customer otherwise they would have done mass culling of stores as they did in SoCal over the last 15 years.
So the state is trying desperately to prolong the inevitable, which is a mass purge of grocery stores that wipes a hundred or so stores off the map in the greater Phoenix metroplex. They know what this will do for property taxes and employment. C&S is almost a guarantee that purge of stores would happen as they inevitably crash and burn taking down this hundred stores with them. But I don't see them being open to letting this merger happen in any fashion, and I also think that they will be proven to be making a big mistake in trying to get C&S to operate more stores. I do have to assume that they chose to license the Safeway name because they must intend to rebrand all the kept locations as Frys... That would eliminate the Albertsons name from all Kroger owned operations in California and Arizona presuming the merger went through. There is no reason to rebrand kept Safeway stores as Albertsons when they're going to have to be taking down Albertsons signs just over the state line in California, and that also makes me wonder if they are going to make the mistake of rebranding all kept Albertsons as Ralphs in SoCal. Clearly the banner strategy has changed based on the shifting store counts.
I'm not sure Arizona / Phoenix is as overstored anymore.
Fleming / ABCO went under in 2001 and only a couple dozen former Fleming / ABCO stores are still supermarkets. The vast majority (30+ are either vacant or other uses).
Since 2006 Albertsons has closed 1/2 of its stores (I believe it's peak was 60/61 stores and now it is at 30).
Since 2008 Bashas' has closed at least 30 stores between the Bashas, Food City and AJ's banners).
Safeway and Fry's have also closed about a dozen stores each since the mid 2000s (although Fry's has probably opened almost as many as it has closed and Safeway opened about 4 - 5).
It's pretty much at the point that in most places in Arizona Fry's and Albertsons or Safeway are the only traditional supermarkets left. Bashas' is a shell of itself that has really poor geographic distribution and their stores probably do 1/2 the volume of an Albertsons or Safeway unit.
I think the idea is to get CO and AZ off their backs by saying look we are basically divesting 80%+ of Albertsons/Safeway in your states - what more do you AGs want us to do? We are basically not "merging" in your state. And yes, that is true, the problem is the Albertsons/Safeway Stores end up in the hands of an operator that has a lot of questions as to if they can survive or not.
Let's take this a step further. If they announced the buyer for CO and/or AZ was going to be Raleys, Save Mart, Ahold, Stater, AWG, or some other established party- how would people's opinions change on this merger?
I actually think selling more stores to C&S makes things even worse... it will make the failure of C&S operated stores, if they fail in the manner Haggen did, even more devastating to more employees/neighborhoods.
I think in Arizona if they named Raley's as the buyer instead of C&S there would still be pushback because of their ownership of Bashas.
The fact is that Arizona, especially Phoenix, was one of the most over-stored markets in America for several decades. Now they're having to deal with the deteriorating dead malls and white space all over the place. They know that the store count of Kroger and Albertsons is too high, and realistically they could clean up the Frys division and probably close 80% of the Albertsons owned stores, absorbing their business almost entirely. The only thing that keeps all these stores open is intense competition to battle for the customer otherwise they would have done mass culling of stores as they did in SoCal over the last 15 years.
So the state is trying desperately to prolong the inevitable, which is a mass purge of grocery stores that wipes a hundred or so stores off the map in the greater Phoenix metroplex. They know what this will do for property taxes and employment. C&S is almost a guarantee that purge of stores would happen as they inevitably crash and burn taking down this hundred stores with them. But I don't see them being open to letting this merger happen in any fashion, and I also think that they will be proven to be making a big mistake in trying to get C&S to operate more stores. I do have to assume that they chose to license the Safeway name because they must intend to rebrand all the kept locations as Frys... That would eliminate the Albertsons name from all Kroger owned operations in California and Arizona presuming the merger went through. There is no reason to rebrand kept Safeway stores as Albertsons when they're going to have to be taking down Albertsons signs just over the state line in California, and that also makes me wonder if they are going to make the mistake of rebranding all kept Albertsons as Ralphs in SoCal. Clearly the banner strategy has changed based on the shifting store counts.
I'm not sure Arizona / Phoenix is as overstored anymore.
Fleming / ABCO went under in 2001 and only a couple dozen former Fleming / ABCO stores are still supermarkets. The vast majority (30+ are either vacant or other uses).
Since 2006 Albertsons has closed 1/2 of its stores (I believe it's peak was 60/61 stores and now it is at 30).
Since 2008 Bashas' has closed at least 30 stores between the Bashas, Food City and AJ's banners).
Safeway and Fry's have also closed about a dozen stores each since the mid 2000s (although Fry's has probably opened almost as many as it has closed and Safeway opened about 4 - 5).
It's pretty much at the point that in most places in Arizona Fry's and Albertsons or Safeway are the only traditional supermarkets left. Bashas' is a shell of itself that has really poor geographic distribution and their stores probably do 1/2 the volume of an Albertsons or Safeway unit.
It's been a couple of years since I talked to my former Arizona peers, but there definitely is still an over supply of stores even with the population growth in the area. Still a lot of concern from many chains that they will lose their anchor Albertsons or Safeway store, and many of the developers/owners of these centers are concerned. They have to be the ones putting pressure on their legislators to push back on the merger because they know that they are going to be stuck with a lot of worthless commercial real estate in a market that suddenly is more restrictive than California about approving new residential developments due to water concerns. In California you don't even need much approval, just go bulldoze your shopping center or office complex and you can build it 5 stories up with so called luxury apartments. Arizona is actually looking at these plans now and questioning the use when so much is already flagged for development. So if you're a retail landlord and you own that Safeway, Albertsons, Bashas etc. strip mall you're very worried about your investment.
brendenmoney wrote: ↑April 22nd, 2024, 10:44 pm
It's hard for me to see how Albertsons and Kroger thought this new deal would entice the FTC any better. I know someone said maybe it was simply to get the states that were suing off their backs, but the FTC was very clear that C&S is simply a questionable buyer, and it's going to take actual legit regional supermarket operators as the divest buyers to even remotely sway the FTC into considering the deal.
I think this change was made in an attempt to sway public opinion. Most people don't understand the details, all they see is that the number of divested stores went from 413 to 579. That looks like a big increase, so people will think that Kroger is being reasonable and addressing the government's concerns about competition.
