What now, SuperValu?

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Re: What now, SuperValu?

Post by Bagels »

UNFI has been trying to sell Cub for nearly two years. It’s had talks with both Kroger and Albertsons, but neither were interested. Since 2018, the MSP media has speculated that UNFI would have to sell stores individually / in blocks in order to maximize its sales pricing. Kroger was rumored to be closing in on the chain last fall — although many questioned the rumors, given the franchise model — but now it appears it’s headed toward the fate that was originally speculated.

Hard to believe that in less than a decade, the two players that dominated the market (Cub and Rainbow) would cease to exist.... kinda, I guess, given that Cub will likely soldier on as a franchise model.
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Re: What now, SuperValu?

Post by storewanderer »

Well with Target being a hometown favorite there in MSP and significantly expanding its grocery operation, plus Hy-Vee, it is not surprising. The strength of Hy-Vee is most impressive.

I think MSP was Roundy's sacrifice to get money to fund expansion of Mariano's. They probably knew Rainbow could not compete against Hy-Vee and it was a wise decision to divert resources to Chicago and build Mariano's vs. keep MSP.

When Supervalu sells stores, it is always about keeping the supply business if they can. It seems like they would rather sell 25 of 40 stores piecemeal resulting in 15 store closures and keep the supply and technology agreement for the 25 stores (forget the fact that 20 of the 25 will go out of business or be sold to some non-SVU customer in a few years after being run down under independent ownership), than sell all 40 stores and lose the supply business.

It is very possible the franchisees did not want to sell their stores to SVU.
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Re: What now, SuperValu?

Post by retailfanmitchell019 »

storewanderer wrote: April 7th, 2020, 12:08 am Well with Target being a hometown favorite there in MSP and significantly expanding its grocery operation, plus Hy-Vee, it is not surprising. The strength of Hy-Vee is most impressive.

I think MSP was Roundy's sacrifice to get money to fund expansion of Mariano's. They probably knew Rainbow could not compete against Hy-Vee and it was a wise decision to divert resources to Chicago and build Mariano's vs. keep MSP.

When Supervalu sells stores, it is always about keeping the supply business if they can. It seems like they would rather sell 25 of 40 stores piecemeal resulting in 15 store closures and keep the supply and technology agreement for the 25 stores (forget the fact that 20 of the 25 will go out of business or be sold to some non-SVU customer in a few years after being run down under independent ownership), than sell all 40 stores and lose the supply business.

It is very possible the franchisees did not want to sell their stores to SVU.
Funding expansion of Mariano's must have something to do with the Dominick's closure...
Roundy's sold Rainbow in May 2014. Jerry's Foods, which franchises Cub stores, also bought a Rainbow in Richfield (kind of near the airport), keeping it under the Rainbow name. That store closed in 2018.
Rainbow seemed to have a decline in quality and service under Roundy's.

Rainbow was founded in 1983 by Sid Applebaum and DB Reinhart of Wisconsin-based Gateway Foods. Applebaum's was owned by National Tea/Loblaws in the late 70's, but was sold back to Sid Applebaum.
By the mid-late 80's, all Applebaum's stores were rebranded as Rainbow. Gateway Foods was then sold to wholesaler Scrivner.
Scrivner was sold to Fleming in 1994, with Rainbow becoming a retail operation under the same umbrella as ABCO Foods and Baker's.
Rainbow built a lot of 55k-60k sqft stores in suburban MSP in the 90's. Fleming had its struggles at the time, and Rainbow was put up on the market in 2000, with Albertsons Inc. rumored to buy them.
They were put up for sale again in 2003 when Fleming was going under. Albertsons was no longer a suitor, and Fleming sold Rainbow to Roundy's.
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Re: What now, SuperValu?

Post by pseudo3d »

retailfanmitchell019 wrote: April 7th, 2020, 4:17 pm
storewanderer wrote: April 7th, 2020, 12:08 am Well with Target being a hometown favorite there in MSP and significantly expanding its grocery operation, plus Hy-Vee, it is not surprising. The strength of Hy-Vee is most impressive.

I think MSP was Roundy's sacrifice to get money to fund expansion of Mariano's. They probably knew Rainbow could not compete against Hy-Vee and it was a wise decision to divert resources to Chicago and build Mariano's vs. keep MSP.

When Supervalu sells stores, it is always about keeping the supply business if they can. It seems like they would rather sell 25 of 40 stores piecemeal resulting in 15 store closures and keep the supply and technology agreement for the 25 stores (forget the fact that 20 of the 25 will go out of business or be sold to some non-SVU customer in a few years after being run down under independent ownership), than sell all 40 stores and lose the supply business.

It is very possible the franchisees did not want to sell their stores to SVU.
Funding expansion of Mariano's must have something to do with the Dominick's closure...
Roundy's sold Rainbow in May 2014. Jerry's Foods, which franchises Cub stores, also bought a Rainbow in Richfield (kind of near the airport), keeping it under the Rainbow name. That store closed in 2018.
Rainbow seemed to have a decline in quality and service under Roundy's.

Rainbow was founded in 1983 by Sid Applebaum and DB Reinhart of Wisconsin-based Gateway Foods. Applebaum's was owned by National Tea/Loblaws in the late 70's, but was sold back to Sid Applebaum.
By the mid-late 80's, all Applebaum's stores were rebranded as Rainbow. Gateway Foods was then sold to wholesaler Scrivner.
Scrivner was sold to Fleming in 1994, with Rainbow becoming a retail operation under the same umbrella as ABCO Foods and Baker's.
Rainbow built a lot of 55k-60k sqft stores in suburban MSP in the 90's. Fleming had its struggles at the time, and Rainbow was put up on the market in 2000, with Albertsons Inc. rumored to buy them.
They were put up for sale again in 2003 when Fleming was going under. Albertsons was no longer a suitor, and Fleming sold Rainbow to Roundy's.
Albertsons DID buy two Rainbow stores (both former Smith's) in El Paso though as part of that (along with the Food 4 Less stores that would later become the groundwork for the "modern" Lucky), with articles suggesting that they were quick conversions to Albertsons (overnight reset).
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Re: What now, SuperValu?

Post by retailfanmitchell019 »

pseudo3d wrote: April 7th, 2020, 5:36 pm
retailfanmitchell019 wrote: April 7th, 2020, 4:17 pm
storewanderer wrote: April 7th, 2020, 12:08 am Well with Target being a hometown favorite there in MSP and significantly expanding its grocery operation, plus Hy-Vee, it is not surprising. The strength of Hy-Vee is most impressive.

I think MSP was Roundy's sacrifice to get money to fund expansion of Mariano's. They probably knew Rainbow could not compete against Hy-Vee and it was a wise decision to divert resources to Chicago and build Mariano's vs. keep MSP.

When Supervalu sells stores, it is always about keeping the supply business if they can. It seems like they would rather sell 25 of 40 stores piecemeal resulting in 15 store closures and keep the supply and technology agreement for the 25 stores (forget the fact that 20 of the 25 will go out of business or be sold to some non-SVU customer in a few years after being run down under independent ownership), than sell all 40 stores and lose the supply business.

It is very possible the franchisees did not want to sell their stores to SVU.
Funding expansion of Mariano's must have something to do with the Dominick's closure...
Roundy's sold Rainbow in May 2014. Jerry's Foods, which franchises Cub stores, also bought a Rainbow in Richfield (kind of near the airport), keeping it under the Rainbow name. That store closed in 2018.
Rainbow seemed to have a decline in quality and service under Roundy's.

Rainbow was founded in 1983 by Sid Applebaum and DB Reinhart of Wisconsin-based Gateway Foods. Applebaum's was owned by National Tea/Loblaws in the late 70's, but was sold back to Sid Applebaum.
By the mid-late 80's, all Applebaum's stores were rebranded as Rainbow. Gateway Foods was then sold to wholesaler Scrivner.
Scrivner was sold to Fleming in 1994, with Rainbow becoming a retail operation under the same umbrella as ABCO Foods and Baker's.
Rainbow built a lot of 55k-60k sqft stores in suburban MSP in the 90's. Fleming had its struggles at the time, and Rainbow was put up on the market in 2000, with Albertsons Inc. rumored to buy them.
They were put up for sale again in 2003 when Fleming was going under. Albertsons was no longer a suitor, and Fleming sold Rainbow to Roundy's.
Albertsons DID buy two Rainbow stores (both former Smith's) in El Paso though as part of that (along with the Food 4 Less stores that would later become the groundwork for the "modern" Lucky), with articles suggesting that they were quick conversions to Albertsons (overnight reset).
The NM/TX Rainbow stores were a discount format, operated separately from the Minnesota stores.
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Re: What now, SuperValu?

Post by Bagels »

I agree that Cub's franchising model makes the chain unattractive to the likes of Kroger and Albertsons, and acquiring the non-Supervalu stores -- assuming the owner's are willing to sell -- would make the acquisition too costly. It isn't unsurprising that the franchisee system would be unattractive, especially to Kroger:
o Some of franchises are located in prime areas ... likely with non-compete clauses.
o While the franchises use some Cub decor, they have their own furniture/fixtures. Looking at photos on Yelp, some locations have seen some fairly costly renovations. This isn't that big of a deal, but for a chain like Kroger that's pushing its distinct remodels as a way to attract shoppers, it isn't ideal.
o Would Supervalu be willing to see distribution rights to the franchisees? if not, they wouldn't carry Kroger/Albertsons private label brands, or so-called signature deli/bakery/meat items.
...and so forth.

I'd be the remaining stores will be split between Hy-Vee, independents (using the Cub name) and others (e.g Whole Foods, or split up and used as Trader Joes, Fresh Thyme, Sprouts, etc.) If Kroger did decide to bid, I'd place my bets that it'll be a handful of stores only, and they'd be rebannered (Food 4 Less or Roundy's),.
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Re: What now, SuperValu?

Post by pseudo3d »

retailfanmitchell019 wrote: April 7th, 2020, 5:46 pm
pseudo3d wrote: April 7th, 2020, 5:36 pm
retailfanmitchell019 wrote: April 7th, 2020, 4:17 pm
Funding expansion of Mariano's must have something to do with the Dominick's closure...
Roundy's sold Rainbow in May 2014. Jerry's Foods, which franchises Cub stores, also bought a Rainbow in Richfield (kind of near the airport), keeping it under the Rainbow name. That store closed in 2018.
Rainbow seemed to have a decline in quality and service under Roundy's.

Rainbow was founded in 1983 by Sid Applebaum and DB Reinhart of Wisconsin-based Gateway Foods. Applebaum's was owned by National Tea/Loblaws in the late 70's, but was sold back to Sid Applebaum.
By the mid-late 80's, all Applebaum's stores were rebranded as Rainbow. Gateway Foods was then sold to wholesaler Scrivner.
Scrivner was sold to Fleming in 1994, with Rainbow becoming a retail operation under the same umbrella as ABCO Foods and Baker's.
Rainbow built a lot of 55k-60k sqft stores in suburban MSP in the 90's. Fleming had its struggles at the time, and Rainbow was put up on the market in 2000, with Albertsons Inc. rumored to buy them.
They were put up for sale again in 2003 when Fleming was going under. Albertsons was no longer a suitor, and Fleming sold Rainbow to Roundy's.
Albertsons DID buy two Rainbow stores (both former Smith's) in El Paso though as part of that (along with the Food 4 Less stores that would later become the groundwork for the "modern" Lucky), with articles suggesting that they were quick conversions to Albertsons (overnight reset).
The NM/TX Rainbow stores were a discount format, operated separately from the Minnesota stores.
If it was a discount format, it makes it even more impressive that a conversion of Albertsons was done in (apparently) very little time.
Bagels wrote: April 7th, 2020, 8:31 pm I agree that Cub's franchising model makes the chain unattractive to the likes of Kroger and Albertsons, and acquiring the non-Supervalu stores -- assuming the owner's are willing to sell -- would make the acquisition too costly. It isn't unsurprising that the franchisee system would be unattractive, especially to Kroger:
o Some of franchises are located in prime areas ... likely with non-compete clauses.
o While the franchises use some Cub decor, they have their own furniture/fixtures. Looking at photos on Yelp, some locations have seen some fairly costly renovations. This isn't that big of a deal, but for a chain like Kroger that's pushing its distinct remodels as a way to attract shoppers, it isn't ideal.
o Would Supervalu be willing to see distribution rights to the franchisees? if not, they wouldn't carry Kroger/Albertsons private label brands, or so-called signature deli/bakery/meat items.
...and so forth.
Was Kroger always so gung-ho on "distinct remodels"? They were pushing the "Fresh Fare" décor really hard for a few years, even with old Greenhouse stores and newer (less than 10 years old) stores alike. As I had grown up in an area with always Kroger, I never experienced anything that was acquired from another store (chainwide or not).
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Re: What now, SuperValu?

Post by Bagels »

pseudo3d wrote: April 7th, 2020, 9:24 pmWas Kroger always so gung-ho on "distinct remodels"? They were pushing the "Fresh Fare" décor really hard for a few years, even with old Greenhouse stores and newer (less than 10 years old) stores alike. As I had grown up in an area with always Kroger, I never experienced anything that was acquired from another store (chainwide or not).
Not at all. I grew up in Metro Detroit; all stores have been uniformly remodeled (to some degree) or replaced within the past decade. Prior to that, they had a hodgepodge of interiors. Heck, Kroger built quite a few stores in the area during the late 1990s/early 2000s, and some featured the last Kroger interior, whereas others used the modified Ralphs interior that the chain adopted. I suspect this was because the latter was more costly to implement.

But Kroger's mentioned in recent years that stores that receive an updated interior have strong same store gains. Previously, stores would be deep cleaned, painted where necessary, have their floors polished, receive new furniture/fixtures (FF) where appropriate, etc. Their were a pair of stores where my late grandmother lived; both stores were from a chain that Kroger acquired in the 1980s, and neither had received a new interior since. Both stores were scheduled to (and have since been) replaced by a new Marketplace, but Kroger put new interiors for the final three years of their life. Granted, it was done cheaply, but it's more than what they've historically done.

That said, obviously some stores in some regions have different interiors. Harris Teeter has its own interior, although Kroger FF have been making greater appearances. I've never been into a Fred Meyer, but it appears to have a slightly modified decor package. Marianos/Roundy's / Pick 'n Save were recently acquired and have different interiors, etc.

But I suspect Cub Foods is different -- Supervalu's remodels were low budget, and largely used the existing FF, supplemented with ones pulled from closed ex-Albertson stores. The debt from these remodels would be reflected in the purchase, and I suspect Kroger would not be interested.
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Re: What now, SuperValu?

Post by storewanderer »

pseudo3d wrote: April 7th, 2020, 5:36 pm
Albertsons DID buy two Rainbow stores (both former Smith's) in El Paso though as part of that (along with the Food 4 Less stores that would later become the groundwork for the "modern" Lucky), with articles suggesting that they were quick conversions to Albertsons (overnight reset).
The NM/TX Rainbow stores were a discount format, operated separately from the Minnesota stores.
[/quote]

If it was a discount format, it makes it even more impressive that a conversion of Albertsons was done in (apparently) very little time.

[/quote]

The El Paso Rainbow Stores were very short lived as Rainbow. There was some kind of store swap where Smiths gave those stores to Fleming in exchange for some Furrs in NM or something along those lines back when Furrs went under and Fleming was involved with divying up those assets. The El Paso Rainbows operated as conventional stores, they were not a warehouse/discount format. Albertsons took the stores over when Fleming went bankrupt and rebannered them as Albertsons/Sav-On combo stores. They were remodeled into the Jewel interior when taken over. I am not sure if Fleming remodeled them out of Smiths decor but suspect if they did, it was a simple wall job and nothing more.

The Albertsons on Montana Ave. in El Paso still has that Jewel interior and this store is still, aside from the decor change, a Smiths. Some of the flooring appears to be leftover from Smiths but possibly was replaced (brown flooring in center store). Product placement on the aisles is largely identical to a Smiths right down to the large displays of promotional items between the entry and the deli.

I didn't even recall Rainbow was in NM (Las Cruces?).
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Re: What now, SuperValu?

Post by arizonaguy »

pseudo3d wrote: April 7th, 2020, 9:24 pm
retailfanmitchell019 wrote: April 7th, 2020, 5:46 pm
pseudo3d wrote: April 7th, 2020, 5:36 pm
Albertsons DID buy two Rainbow stores (both former Smith's) in El Paso though as part of that (along with the Food 4 Less stores that would later become the groundwork for the "modern" Lucky), with articles suggesting that they were quick conversions to Albertsons (overnight reset).
The NM/TX Rainbow stores were a discount format, operated separately from the Minnesota stores.
If it was a discount format, it makes it even more impressive that a conversion of Albertsons was done in (apparently) very little time.
Bagels wrote: April 7th, 2020, 8:31 pm I agree that Cub's franchising model makes the chain unattractive to the likes of Kroger and Albertsons, and acquiring the non-Supervalu stores -- assuming the owner's are willing to sell -- would make the acquisition too costly. It isn't unsurprising that the franchisee system would be unattractive, especially to Kroger:
o Some of franchises are located in prime areas ... likely with non-compete clauses.
o While the franchises use some Cub decor, they have their own furniture/fixtures. Looking at photos on Yelp, some locations have seen some fairly costly renovations. This isn't that big of a deal, but for a chain like Kroger that's pushing its distinct remodels as a way to attract shoppers, it isn't ideal.
o Would Supervalu be willing to see distribution rights to the franchisees? if not, they wouldn't carry Kroger/Albertsons private label brands, or so-called signature deli/bakery/meat items.
...and so forth.
Was Kroger always so gung-ho on "distinct remodels"? They were pushing the "Fresh Fare" décor really hard for a few years, even with old Greenhouse stores and newer (less than 10 years old) stores alike. As I had grown up in an area with always Kroger, I never experienced anything that was acquired from another store (chainwide or not).
Kroger still had the Smith's decor (prior to Kroger ownership) in several Fry's stores in Arizona until the mid 2000s and the Fred Meyer Marketplace decor (installed prior to Kroger ownership) in many Fry's Marketplace stores until around 2012 or so.

Safeway used to be the best about "standardizing" stores that they purchased. Safeway purchased a number of ABCO Desert Market stores (another former Fleming chain) and did a relatively thorough job renovating most of them (at least the 1990s build stores). There was an older ABCO store that they purchased in Phoenix (I believe a former Alpha Beta) that still had pre-Safeway furnishings and fixtures until a couple of years ago when it received the standard Lifestyle package with all new furnishings and fixtures.
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