What now, SuperValu?

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storewanderer
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Re: What now, SuperValu?

Post by storewanderer » November 9th, 2019, 12:20 am

bm10k wrote:
August 6th, 2017, 6:30 am
http://www.startribune.com/supervalu-pl ... 438604343/

Look Like Supervalu is trying to revitalize Cub.it makes me wonder if it too little too late
It is funny, this article at the very end mentions Oakdale. I was there recently. The new Cub (which is a structure with a layout identical to any new Albertsons built in the past decade, except with a different decor package and self bagging checkstands) sits right across the road from a new Hy Vee.

On a weekday at noontime, the Cub had perhaps 20 customers. That may be an over-estimate. Two checkouts open which did not have steady traffic. Deli hardly had any product, but had a few employees; big hot food area which was very empty; one flavor of pizza by the slice, over at the cold case part of the case is filled with mock party trays. They have a nice enough looking seating area in front of the deli for dine in meals; nobody was sitting there eating anything. Seafood/meat is large and looked okay but was not staffed (ring bell). Bakery also was real lightly stocked. Produce looked good. Actually the store looked fine. There was nothing wrong with it other than lack of customers and the perimeter departments definitely spoke to the lack of customers. The employees seemed indifferent; the person at self checkout did not greet me or thank me or the other person using them at the same time as I was. I looked around deli and 2 employees looked at me but did not say anything to me.

Then across the street to Hy Vee. You'd think you were at Disneyland. There must have been 400 cars in the parking lot. The deli and food service area alone had 20+ employees. The presentation and appearance of the departments in the store is top of the line. The area where customers sit and eat food in front of the deli was packed. They have a sit down restaurant walled off from the main store as well and it appeared to have customers eating as well. Bakery had at least 5 employees. The entire Hy Vee had activity throughout the store. The employees were very friendly and I was greeted numerous times throughout the store even if I just looked at a service counter for a few seconds (Hy Vees have a ton of service counters; there is service Asian, service Pizza, service Chicken, service sandwich, service deli, standard bakery, a second bakery/chocolate counter up at the front door, service meat...).

I got to go into some other Hy Vee locations around Minneapolis and had similar observations. The store were very busy. Most Cub locations are not in the direct line of fire of Hy Vee but within a mile or so. The Cub locations are noticeably less busy than the Hy Vee locations are, but are probably doing okay volume.

Hy Vee also has an interesting deal going with Starbucks. They are building gas stations in the parking lot. The convenience store building is a perhaps 10,000 square foot structure that is half convenience store and half Starbucks (with drive through and seating). These Hy Vee Starbucks present as if they are a standard corporate run Starbucks Store. Definitely a far leap from the usual supermarket kiosk Starbucks.

After seeing what I saw it will be interesting to see what comes of Cub. I used to think Cub would be a good purchase for Albertsons or Kroger, but I will be interested to see now what happens. Hy Vee is expanding rapidly around there and is executing like a well oiled machine at every location. I don't know how they do it. Hy Vee's new stores just keep getting better and better. The old stores of 20 years ago Hy Vee built were already well above average but these new ones are even better.

Cub isn't a bad store. They are reasonably priced, fresh departments look pretty fresh, and they are clean. I would put them about on par with a typical Kroger type operation. They are priced quite a bit lower than a typical Albertsons operation. The locations that do not have a Hy Vee nearby seem to be pulling strong traffic, but I have to think Hy Vee will continue to expand.

Hy Vee is a really tough competitor. I really struggle with if I think they or Wegmans are the best grocer in the US. But for some reason, I am more impressed with Hy Vee.

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Re: What now, SuperValu?

Post by Bagels » December 12th, 2019, 6:21 am

Meijer abandoned plans to enter the Minnesota market because they believed it was "oversupermarketed." The irony is... some of the parcels they bought were sold to Hy Vee, which is kicking Cub Foods butt.

Cub Foods is for sale, but I have a difficult time believing Kroger will be the buyer. Cub Foods is clearly distressed -- their market share plunged by nearly half, from 40%, in just a few years -- and Kroger isn't known for being interested in distressed chains (e.g. Dominick's, despite its heavy interest in Chicagoland). Additionally, Cub Foods has completed remodeling nearly all of its stores, which wouldn't sit well with Kroger, which wants all of its core stores to be similar. Which is ironic... in Metro Detroit, a local Kroger still sported its legacy Great Scott (a chain it acquired in 1990!) interior -- complete with the stylish Save-A-Lot-style turnstile -- until it was renovated in the early 2010s.

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Re: What now, SuperValu?

Post by pseudo3d » April 4th, 2020, 12:02 pm

Looks like UNFI is selling the retail estate of 15 of the stores it owns...when only devalues the chain and make it less of an attractive offer (not to mention the fact that about half of the chain is franchised, which would pose issues in distribution, name recognition, etc.). At this rate, UNFI should seriously consider trying to sell off the chain in pieces to Hy-Vee.

https://www.startribune.com/unfi-sells- ... 568737362/

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Re: What now, SuperValu?

Post by storewanderer » April 4th, 2020, 10:32 pm

UNFI is going to be bleeding independent customers big time in the NW once C&S opens its OR/WA distribution, and better get control over what they are doing real fast. I am curious if C&S will push more into SoCal too. UNFI better hope not.

The longer they keep Cub, the less it will be worth. Funny Shoppers is still about half open too. It appears this outfit does not quite know how to sell stores. Let me give a little clue: you don't devalue the asset you are trying to sell. That means you don't close pharmacies like they did at Shoppers. That means you don't sell the underlying real estate like they just did on these Cubs.

This move makes me think they are going to try to find one of their customers/small regional operators to take over Cub. Perhaps multiple operators will take over the different Cub locations. It could be like Price Chopper in Kansas City where you have a lot of different owners all with different sale print ads, some with loyalty cards some without, but common sponsorships of events and common store decor, bags, etc. It will be interesting to see how this works out.

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Re: What now, SuperValu?

Post by retailfanmitchell019 » April 4th, 2020, 11:23 pm

At this point, if Albertsons or Kroger doesn't take Cub, I could see Hy-Vee acquiring a few stores, or maybe all the Cub stores (in that scenario, the FTC would probably have something to say). Cub Foods also has a handful of stores in Minnesota outside of the TC metro (The stores in Rochester and Mankato, 90 and 80 miles south of Minneapolis respectively, also compete with Hy-Vee). There is also a Cub in Freeport, IL, west of Rockford.
A good option would be for Cub to be sold piecemeal. Lunds/Byerlys could buy some stores in upper-middle income areas, Hy-Vee could buy a few stores as I stated above. Coborn's could buy some stores to make inroads into the TC metro (they bought Hornbacher's in Fargo).
I agree with what storewanderer has said about Hy-Vee being a strong operator. They put a lot of emphasis on hot food service counters. Their stores seem to be in between the size of an Albertsons and a Wegmans. I might check one out if I go back to Minnesota this summer.
Now Hy-Vee is converting their Market Grille restaurants to Wahlburgers.

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Re: What now, SuperValu?

Post by SamSpade » April 5th, 2020, 9:08 am

retailfanmitchell019 wrote:
April 4th, 2020, 11:23 pm
Now Hy-Vee is converting their Market Grille restaurants to Wahlburgers.
Dang it!
But, I guess a "growing national brand" compared to trying to brand it as part of the supermarket probably has some traction.

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Re: What now, SuperValu?

Post by pseudo3d » April 5th, 2020, 9:38 am

I imagine UNFI made the conditions very unfavorable to a potential larger buyer. In addition to expecting them to continue to be supplied by UNFI (with no distribution centers included), they probably provided no support in actually buying out the franchised Cub Foods stores, which no doubt slowed the transformation of the chain.

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Re: What now, SuperValu?

Post by storewanderer » April 6th, 2020, 6:33 pm

It appears 29 Cub Stores are franchised and at least 20 of these are franchised by "Jerry's."

Now it makes a little more sense. The last night I was in MSP, I went into a Cub that seemed... a little different than the others I had gone into. It seemed a little more like WinCo and a little less like a conventional than the other Cubs I had gone into. But the pricing, merchandising, etc. were pretty much the same as the others, so I just figured it hadn't been remodeled as recently as the others. I traced back and found it was one of those franchise stores run by "Jerry's." Had I not done research, I would not have known it was a franchise.

I didn't know they still have that many franchise stores left. That is a serious issue for trying to sell the chain off.

Also given UNFI keeps talking like it wants to make quick deals with assets it puts up for sale then no deals happening, potential buyers are seeing that and see a seller that talks a lot of talk but isn't getting a lot of action. Potential buyers may well be waiting knowing they can hold out for a better deal the more eager UNFI gets. If UNFI were smart, they would just announce they are keeping Cub for the time being. It is profitable so why not keep it.

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Re: What now, SuperValu?

Post by bayford » April 6th, 2020, 8:08 pm

retailfanmitchell019 wrote:
April 4th, 2020, 11:23 pm
A good option would be for Cub to be sold piecemeal. Lunds/Byerlys could buy some stores in upper-middle income areas, Hy-Vee could buy a few stores as I stated above. Coborn's could buy some stores to make inroads into the TC metro (they bought Hornbacher's in Fargo).
Coborn's would be a great fit for some of the Cub stores, especially those outside of the Twin Cities or on the periphery. But after having bought Hornbacher's and expanded Cash Wise throughout North Dakota, I wonder how much more capacity they have for additional expansion.

If they go piecemeal, Super One Foods could possibly be an interested buyer of one or two as well.

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Re: What now, SuperValu?

Post by pseudo3d » April 6th, 2020, 8:52 pm

storewanderer wrote:
April 6th, 2020, 6:33 pm
If UNFI were smart, they would just announce they are keeping Cub for the time being. It is profitable so why not keep it.
It's not just keeping Cub Foods, SuperValu KNEW Hy-Vee was a threat, so it immediately should have started circling the wagons by buying out franchises (at least in the main Minneapolis/St. Paul area) to make a consistent supermarket chain that could hold its own in light of new competition. Giving it a dedicated distribution center (which I don't think Cub has) would also help make it more of an attractive deal...and at that point, all they would have to do is wait before Albertsons or Kroger pounces on it.

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