Kroger to buy Roundy's for $800 million

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Re: Kroger to buy Roundy's for $800 million

Post by rwsandiego »

pseudo3d wrote:
rwsandiego wrote:
storewanderer wrote:...I don't think the Mariano's banner will be disappearing. If they structured the deal in a way that that name goes away, it would be a terrible deal.
I agree.

Perhaps Pick'n'Save would be re-branded as Copp's (or vice versa), but there is no reason for the Mariano's name to go away. Kroger hasn't operated in Chicago since 1971, so there's no brand equity there and Food 4 Less is a completely different operation. I suspect Albertsons would not sell them the Dominick's name, so what else would they call the stores? Besides, Mariano's has a great reputation, even in parts of the metro area where they do not yet have stores. It would make about as much sense as re-branding Jewel as "Albertsons."

Now, if they want to re-brand and convert Ralphs to Mariano's I'll be doing handstands, but that would be equally foolish.
I seem to remember there being a quote that Mariano's was built to kill Dominick's, so there is no way Mariano's or Kroger will dredge up the Dominick's name even if Albertsons abandoned it. Rebranding Jewel to Albertsons might have happened if Lucky's absorption was a success and Albertsons kept marching north and east like they were doing up until 2001.

Kroger won't change Mariano's name at all. Worst case scenario is it basically becomes like Kroger's brands in other parts of the country.
I was being facetious about Dominick's. Although I never heard the quote about Mariano's being developed to kill Dominick's (it didn't need the help, as Safeway did a perfectly good job on its own), I have heard it was developed to take Bob Mariano's vision of Dominick's to the next level. And that he did.

Regarding Jewel, even Albertson's wasn't dumb enough to rebrand it. There was no reason to. Albertson's was not known in Chicago. Of course, they should never have rebranded Lucky. Albertsons should have rebranded their SoCal stores to Lucky or rebranded the more upscale Luckys to Albertsons and the more downscale Albertsons to Lucky.
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Re: Kroger to buy Roundy's for $800 million

Post by storewanderer »

They were planning to convert Jewel to Albertsons. That would have taken place by 2001. Acme was to be converted in 2000 also. The plan was to have Albertsons as a single national grocery banner. I assure you the source I received that information from was very close to the situation. Of course after Lucky and the internal chaos that mess caused, those plans got shelved.
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Re: Kroger to buy Roundy's for $800 million

Post by rwsandiego »

storewanderer wrote:They were planning to convert Jewel to Albertsons. That would have taken place by 2001. Acme was to be converted in 2000 also. The plan was to have Albertsons as a single national grocery banner. I assure you the source I received that information from was very close to the situation. Of course after Lucky and the internal chaos that mess caused, those plans got shelved.
One would have thought the bad experiences with Smitty's in MO, Bruno's in TN, and Super One in IA would have made them pause before converting Lucky, let alone Jewel-Osco and Acme. (Shakes head)
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Re: Kroger to buy Roundy's for $800 million

Post by pseudo3d »

rwsandiego wrote:
storewanderer wrote:They were planning to convert Jewel to Albertsons. That would have taken place by 2001. Acme was to be converted in 2000 also. The plan was to have Albertsons as a single national grocery banner. I assure you the source I received that information from was very close to the situation. Of course after Lucky and the internal chaos that mess caused, those plans got shelved.
One would have thought the bad experiences with Smitty's in MO, Bruno's in TN, and Super One in IA would have made them pause before converting Lucky, let alone Jewel-Osco and Acme. (Shakes head)
Bad experiences? From what I've read, Smitty's-MO and Buttrey actually went over pretty smoothly. Des Moines I'm less sure on, probably was less of a backlash on names and formats then just Albertsons pouring capex into areas it really shouldn't have been in during the first place. (As for TN, that was Seessel's, which was bought from Bruno's and were sold off to Schnucks before any name changes took place)

Lucky, on the other hand, was such a widespread operation that by January 2000, about a third of the stores in the Albertsons chain originally were Lucky. That many stores were going to cause problems just on the sheer number converted alone, to say nothing of changing formats and everything else people liked about Lucky.
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Re: Kroger to buy Roundy's for $800 million

Post by wnetmacman »

pseudo3d wrote:(As for TN, that was Seessel's, which was bought from Bruno's and were sold off to Schnucks before any name changes took place)
I believe that the Seesel's stores were rebranded as Seesel's by Albertsons, which was the beginning of the end. Albertsons never succeeded with those stores, because they have never understood what 'regional retailing' means. They still aren't as good as they should be at it. Schnucks didn't succeed with those stores either, and they eliminated the Seesel's name all together.

Kroger has had success with them because they were already known in Memphis. And they also brought some Seesel's things back that the two prior stores had eliminated.

I had also heard that Albertsons had plans to fully rebrand the entire company, because they don't like running multiple brands. Jewel and Acme would have been far worse than Lucky, and they stopped (thankfully) before getting there. Kroger has always understood running multiple brands and leaving the local touches alone. Yes, they are a national retailer, and there are some things that run across divisions, but each division is run separately.

Having said all of that, and to bring things back to the original subject, I don't see Bob Mariano's departure as a death knell for the Roundy's/Mariano's stores. Kroger will take good ideas to their other divisions, but they won't kill Mariano's.

Don't expect Dominck's to come back, though. That's a dead name.
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Re: Kroger to buy Roundy's for $800 million

Post by pseudo3d »

If Kroger decided to change King Soopers, Fry's, QVC, and Ralphs over to the Kroger name, then that's not going to be a huge upset since those brands have more or less operating as Kroger stores anyway for a number of years now. Mariano's is a higher-end operation than Jewel and wouldn't generally fit the Kroger name (even the nicer stores, as in some divisions, Kroger exists and thrives in the nicest neighborhoods). Converting Mariano's to Kroger at this point would be a disaster.
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Re: Kroger to buy Roundy's for $800 million

Post by wnetmacman »

pseudo3d wrote:If Kroger decided to change King Soopers, Fry's, QVC, and Ralphs over to the Kroger name, then that's not going to be a huge upset since those brands have more or less operating as Kroger stores anyway for a number of years now. Mariano's is a higher-end operation than Jewel and wouldn't generally fit the Kroger name (even the nicer stores, as in some divisions, Kroger exists and thrives in the nicest neighborhoods). Converting Mariano's to Kroger at this point would be a disaster.
Not even close.

The reason Kroger DOESN'T change the names is not because of how the stores 'operate like' Kroger. They do have some Kroger operations, but there are some regional differences. Changing the names on these stores would kill those divisions.
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Re: Kroger to buy Roundy's for $800 million

Post by pseudo3d »

wnetmacman wrote:
pseudo3d wrote:If Kroger decided to change King Soopers, Fry's, QVC, and Ralphs over to the Kroger name, then that's not going to be a huge upset since those brands have more or less operating as Kroger stores anyway for a number of years now. Mariano's is a higher-end operation than Jewel and wouldn't generally fit the Kroger name (even the nicer stores, as in some divisions, Kroger exists and thrives in the nicest neighborhoods). Converting Mariano's to Kroger at this point would be a disaster.
Not even close.

The reason Kroger DOESN'T change the names is not because of how the stores 'operate like' Kroger. They do have some Kroger operations, but there are some regional differences. Changing the names on these stores would kill those divisions.
I can't imagine that those stores would operate that much differently than different Kroger-branded East Coast divisions, like the differences between the former Southwest Division and the Atlanta Division, considering they (the West Coast stores) have been part of Kroger since 1999 (or longer). Especially considering they already carry all the Kroger brands and systems.

Of course, any name changes at this point in the game are going to confuse and disappoint shoppers, but I can't imagine their market share crumbling like you describe.
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Re: Kroger to buy Roundy's for $800 million

Post by wnetmacman »

pseudo3d wrote:Of course, any name changes at this point in the game are going to confuse and disappoint shoppers, but I can't imagine their market share crumbling like you describe.
Do a search of how many Rite Aid stores exist in Louisiana versus the number of stores K&B operated. K&B understood Louisiana. Rite Aid does not.

Kroger lets their regional banners have a large amount of leeway in how they operate, so long as they're profitable. Why do you think that Fred Meyer still operates? They don't have those stores in every region. Sure, the Marketplace stores are similar, but not exact. Regional retailing. Two very important words that Kroger knows well.

It's why Texas has Signature stores, while other regions did not.
It's why Fred Meyer still exists. Albertsons, et. al., would have killed that by now.

It's why Ruler Foods exists. Albertsons doesn't have a limited assortment banner.

It's why Mariano's was purchased. While Albertsons has United/Market Street, assimilation has begun to set in, and some dilution has begun of the banners.

It's why Albertsons stopped its rebannering after Lucky. There was a certain level of expectation with Lucky that Albertsons just couldn't live up to.
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Re: Kroger to buy Roundy's for $800 million

Post by pseudo3d »

wnetmacman wrote:
pseudo3d wrote:Of course, any name changes at this point in the game are going to confuse and disappoint shoppers, but I can't imagine their market share crumbling like you describe.
Do a search of how many Rite Aid stores exist in Louisiana versus the number of stores K&B operated. K&B understood Louisiana. Rite Aid does not.
Different scenario in that Rite Aid eliminated much of what people liked about K&B, including the ice cream. It didn't help that about this time, Rite Aid was going through a scandal at the time they bought Rite Aid and Payless.
Why do you think that Fred Meyer still operates? They don't have those stores in every region. Sure, the Marketplace stores are similar, but not exact.
Like Mariano's or Harris Teeter, Fred Meyer is in a category by itself. Note that I said King Soopers, Fry's, or Ralphs...not FM.

It's why Texas has Signature stores, while other regions did not.
The Signature stores have been pretty much homogenized with the rest of the Southwest division. While I agree that some divisions should have slightly different operations, it was mostly on using the Kroger name for everything, even if there are slight regional variations.
It's why Fred Meyer still exists. Albertsons, et. al., would have killed that by now.
It's why Ruler Foods exists. Albertsons doesn't have a limited assortment banner.
I don't think Albertsons would've killed Fred Meyer, as they kept the Drug Division separate. And, no, while Smitty's Missouri was founded as a licensed version of Smitty's, they had long since dropped those categories.
It's why Mariano's was purchased. While Albertsons has United/Market Street, assimilation has begun to set in, and some dilution has begun of the banners.
Unlike Harris Teeter (or United), I don't believe Roundy's was purchased as a separate division, and sooner or later, the Roundy's brands will start "cross-pollinating" with Kroger brands. They won't become Kroger stores in name but they won't be any more different than Fry's, Ralphs, or King Soopers.

Besides, I think you're either missing the point or distracting from it. Taking Fry's as an example with its current Kroger-like operations at hand, if you rebranded it tomorrow to Kroger, then it would still have different operations, much like there's different operations between Kroger-Atlanta and Kroger-Michigan. Some shoppers will be disappointed and confused, but in the end, it's pretty much meaningless. No one will abandon this newly branded Kroger en masse for Bashas', Kroger, Albertsons, or others like Costco.

Mariano's on the other hand has too far different operations for a Kroger rebranding, and would have to be "Kroger-ized" before that could ever happen. The big problem with Lucky was that it never got a chance to be properly "Albertsons-ized" to really resonate with shoppers (it literally happened some six months after the merger closed).

You can read this Groceteria thread over here but the big problem was the sudden changes of prices and selection of merchandise. If Albertsons had not their ego get ahead of them and waited a few years to fully "Albertsons-ize" Lucky before rolling out a new name, then the backlash wouldn't have been nearly so hard (for the sake of simplicity, let's pretend that the 2006 Macy's conversions didn't happen). Of course, the Macy's conversion was probably another industry lesson on not homogenizing too much.
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