United Supermarkets opens in Pecos

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Re: United Supermarkets opens in Pecos

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klkla wrote: November 13th, 2020, 7:37 pm

Yes. That is it and it's a real phenomenon. In the 1990's Lucky, which was known by all Californians as The Low Price Leader, tried to make their image a little more upscale. They spent a fortune remodeling virtually every store and initiated a new ad campaign to reinforce their new image called The Other Side of Lucky. It was a huge failure and they tried to walk it back but the damage was already done and their stock price fell to a point where Albertson's was able to make an opportunistic takeover of the company.
I think another part of that problem was Safeway got more competitive on price in the mid 90's period. In the late 90's in NorCal I don't think Lucky was any cheaper than Safeway. Lucky certainly put out a good punch and ran a good store with some good deals on ad though, they were more than competitive overall but there were certainly cheaper stores around (F4L, etc.).

However I don't think that had anything to do with why the ASC company was sold to Albertsons... Lucky was not considered a distressed asset at the time of sale, only Acme was. The ASC company seemed to have well run divisions (other than Acme) but was a mismanaged parent extracting profit out of its divisions and not investing back into them properly but did have plenty of money to build a skyscraper in downtown Salt Lake City, UT despite having no real stores anywhere in sight (the closest store was a Sav-On in Elko, NV) other than a small short lived thing called "American Store" in the bottom of their skyscraper.
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Re: United Supermarkets opens in Pecos

Post by klkla »

storewanderer wrote: November 13th, 2020, 11:11 pm I think another part of that problem was Safeway got more competitive on price in the mid 90's period. In the late 90's in NorCal I don't think Lucky was any cheaper than Safeway. Lucky certainly put out a good punch and ran a good store with some good deals on ad though, they were more than competitive overall but there were certainly cheaper stores around (F4L, etc.).

However I don't think that had anything to do with why the ASC company was sold to Albertsons... Lucky was not considered a distressed asset at the time of sale, only Acme was. The ASC company seemed to have well run divisions (other than Acme) but was a mismanaged parent extracting profit out of its divisions and not investing back into them properly but did have plenty of money to build a skyscraper in downtown Salt Lake City, UT despite having no real stores anywhere in sight (the closest store was a Sav-On in Elko, NV) other than a small short lived thing called "American Store" in the bottom of their skyscraper.
Safeway was never competitive with Lucky on pricing except for loss leaders in the ad. It was during this period Lucky went with a rewards card instead of every low prices, however, and that might have lead to that perception.

While Lucky may not have been considered a 'distressed asset' the return on investment for the remodels and subsequent failure of The Other Side of Lucky campaign was what lead to the stock price dropping so much and made them vulnerable to a takeover. They didn't spend a lot of money on Acme so there wasn't much expectation from Wall Street for that division. They did spend an astronomical amount of money on Lucky, however, and the return was much weaker than expected and was a much bigger factor in the decline of the company.
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Re: United Supermarkets opens in Pecos

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klkla wrote: November 14th, 2020, 8:49 pm
Safeway was never competitive with Lucky on pricing except for loss leaders in the ad. It was during this period Lucky went with a rewards card instead of every low prices, however, and that might have lead to that perception.

While Lucky may not have been considered a 'distressed asset' the return on investment for the remodels and subsequent failure of The Other Side of Lucky campaign was what lead to the stock price dropping so much and made them vulnerable to a takeover. They didn't spend a lot of money on Acme so there wasn't much expectation from Wall Street for that division. They did spend an astronomical amount of money on Lucky, however, and the return was much weaker than expected and was a much bigger factor in the decline of the company.
Safeway NorCal was absolutely competitive with Lucky in the mid-late 90's on everyday pricing (especially on perishable and private label items) and there were supposedly some legal reasons why Lucky stopped using the slogan "the low price leader every day" and switched to the slogan "Lucky Means Low Prices." Legal reasons as in, the point was raised that Safeway's pricing was at or below their pricing on many of items everyday and also came out ahead on various baskets tested. The other issue was F4L in SoCal and those price surveys they did, kept coming in below Lucky down there, hence their slogan "the true low price leader."

Back when Lucky instituted the card in NorCal, Safeway was heavy with monthly coupon books, etc. But it wasn't "full price or no deal" at Safeway- there were sale prices, then if you had the coupon you got a better deal. For instance the bread was 1.99 regular, then the sale price was 1.59, then the coupon was for buy 1 get 1 free. Or the canned vegetable was .79 regular, then the sale price was .50, then the coupon was .39. That sort of thing.

On the other hand, those Lucky Stores from the 70's, in the mid 90's, desperately needed those remodels to remain competitive. A number of those 70's stores had no bakery/deli/seafood and one of the objectives of that remodel program was to add those departments into the stores (even if they were very small departments). And looking at how those remodels played out, many of them maintained those basic interiors, floors, etc. well into the 2010's and only recently have those stores really fallen off either through actual extensive remodels or closures. Had Lucky not done that remodel program in the mid 90's, many more of their stores would have fallen into horrid disrepair by the early 2000's.

In absence of that Lucky remodel program in the mid 90's, I think Lucky would have been another Acme by the late 90's...

I'm not sure ASC ever got a real good ROI on the Lucky/Sav-On format stores in NorCal though. They didn't run them long before Albertsons took over and screwed up badly. I assume the combo stores in SoCal had similar questionable results. They definitely never got close to Jewel/Osco level volumes, despite being nice big stores, clean, well merchandised, nicely laid out.

I wonder how Lucky's late 90's results differed in Las Vegas where they did not do combo stores (they did the Sav-On next door as a separate entity so they could get more slot machines in the two stores).
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Re: United Supermarkets opens in Pecos

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Had Albertsons never acquired Lucky in the first place, they would not have broken up in 2006. The Lucky name was legendary in California (mostly in the Bay Area where Albertsons has very little presence).
If I were Albertsons, I would've made a deal with ASC to divest the Lucky chain to its management, or maybe to Ahold (who was eyeing an acquisition out west at the time).
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Re: United Supermarkets opens in Pecos

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retailfanmitchell019 wrote: November 15th, 2020, 8:10 pm Had Albertsons never acquired Lucky in the first place, they would not have broken up in 2006. The Lucky name was legendary in California (mostly in the Bay Area where Albertsons has very little presence).
If I were Albertsons, I would've made a deal with ASC to divest the Lucky chain to its management, or maybe to Ahold (who was eyeing an acquisition out west at the time).
I think Albertsons wanted Lucky and the California presence. Well, they wanted the California presence. They wanted nothing of "Lucky" other than the buildings. Thing is Lucky didn't have really have very nice buildings. Small, large, old, new, small parking lots, big parking lots, weird layouts, normal layouts, good neighborhoods, bad neighborhoods, perimeter departments of dozens of different sizes. Lucky may have had unified decor in its stores but everything about their physical stores was super inconsistent. Lucky had good management, loyal customers, and good merchandising strategies which Albertsons quickly kicked to the curb. They were left with physical stores that were a disjointed mess and after upsetting the customers and employees they failed.
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Re: United Supermarkets opens in Pecos

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storewanderer wrote: November 15th, 2020, 10:20 pm I think Albertsons wanted Lucky and the California presence. Well, they wanted the California presence. They wanted nothing of "Lucky" other than the buildings. Thing is Lucky didn't have really have very nice buildings. Small, large, old, new, small parking lots, big parking lots, weird layouts, normal layouts, good neighborhoods, bad neighborhoods, perimeter departments of dozens of different sizes. Lucky may have had unified decor in its stores but everything about their physical stores was super inconsistent. Lucky had good management, loyal customers, and good merchandising strategies which Albertsons quickly kicked to the curb. They were left with physical stores that were a disjointed mess and after upsetting the customers and employees they failed.
ABS had 180 or so stores in California before the Lucky acquisition. They did best in suburban, middle/upper-middle class areas around LA.
Another reason why Albertsons acquired ASC is to get the profitable drug stores, and to gain a presence in urban areas. This was a big deal for Albertsons, which was suburban-oriented.
The Lucky acquisition went over best in San Diego, because the Lucky name wasn't as well-established there. In San Diego, Lucky was known as Food Basket until the late 80's. Lucky also took over the Alpha Betas there.
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