Raley's to buy Arizona chain Bashas'

[jamcool]

Most of the Food Citys are ex-Bashas’ stores and are generally seen as a downgraded store (supposedly Bashas’ sent their near-expiration meat to those stores) Putting the Food City name on stores without a heavy Hispanic population nearby is basically shutting them down. As turning AJ’s into a health food store, we already have Sprouts everywhere, plus Whole Paycheck and Natural Grocers.

[storewanderer]

Most of the Food Citys are ex-Bashas’ stores and are generally seen as a downgraded store (supposedly Bashas’ sent their near-expiration meat to those stores) Putting the Food City name on stores without a heavy Hispanic population nearby is basically shutting them down. As turning AJ’s into a health food store, we already have Sprouts everywhere, plus Whole Paycheck and Natural Grocers.

My observation of Food City has been the stores seem to have decent foot traffic. They at least have some life to them. Many Bashas I've been into, even the nicer ones, just come off as dead and lifeless; not many customers and not many employees.

AJ's is a gourmet format not a health food format. Trying to make it into something it's not, probably won't end well. There is a difference in those two formats. You could certainly have a "clean label" fresh departments and Organic-focused gourmet format store though. That is basically what Whole Foods is.

[veteran+]

Exactly--my aunt/uncle shop at Bashas' in Sedona and really like it. They moved down from Chicago where they lived equidistant from Jewel/Dominicks. We visited them in 2019 and noticed their excellent bakery--they had some amazing paczkis during the season.

Stater Bros could convert one or two stores in the Coachella Valley to an upscale format and make bank--they have an amazing density of stores.

I do not believe that Stater Bros is fit for that kind of operation. They do what they do proficiently for their specific demographic. They indeed have "upscaled" a bit recently.

If Stater Bros purchased Jensens (surprised that Jensens is still around) and did a knock out job, then perhaps it would make sense.

The Coachella Valley has great affluence but those communities are very small and not contiguous. Location must be extremely precise for an upscale store to thrive and also deal with dramatic retail seasonal changes.

Jensens store footprints are way too small for today's Stater Bros. There's plenty of land, dated shopping centers in the Coachella Valley that can be easily redeveloped or remodeled into a Stater Bros.

My point was that perhaps Stater could learn something about that type of grocer IF they were interested in broadening their operation outside the current format.

All that land is not as easy to redevelop as it seems. One big impediment is the plethora of Native American lands.

[reymann]

i wonder if raley's will retire the loyalty card program at bashas' when they take over operations. that could be step one to improve foot traffic in their stores.

[rwsandiego]

As @arizonaguy said up-thread

...AJ's is a destination store that is a unique format (best supermarket bakery in town) but feels stuck as to what a high end store would be in the 1990s...

In 2021, "gourmet" means the store sells natural, non-GMO, sustainably produced, organic, out-of-the-ordinary products as well as conventionally-produced exotic foods. They don't have to become Sprouts or Whole Foods to do that. AJ's is almost there and with a few tweaks would be brought into the 21st century. Here's a rundown:

• Produce: More organics and higher-quality packaged produce instead of brands like Dole and some weird off-brand. They already sell organics and some locally-produced items, so this should not be too difficult

• Meat/Seafood: Their meat, chicken, and seafood is already high-end grass-fed, hormone-free, sustainably raised/caught, and non-GMO. No change required here.

• Packaged Deli: They already sell organic, uncured, non-GMO brands alongside high-end conventionally-produced products. They could probably make some minor changes here, but not many.

• Cheese: Their cheese selection is rather weak for a "gourmet" store. Much of it is domestically-produced and of the same quality you would find at Safeway. That said, they are better than Sprouts but not as good as Fry's and Whole foods. They would do themselves a favor if they recruited different gourmet cheese buyers.

• Fresh Deli: They should include more uncured, non-GMO, etc lunchmeats and, perhaps, more variety. In fairness, the only AJ's deli I've shopped is the one at Uptown Plaza. The others could have a more extensive selection.

• Prepared Foods: Wouldn't change a thing except for promoting the quality of the ingredients.

• Bakery: Wouldn't change a thing except for promoting the quality of their ingredients.

• Center Store: They already sell an impressive selection of imported foods and domestic artisan and small-producer products. They also do a decent job at selling locally-made products (which Whole Foods used to do). I'd suggest they swap out conventional items for organic ones where they can while keeping the conventional hard-to-find items where there is no organic equivalent.

• Coffee Bar: For the love of Pete, they must improve the quality of the coffee. Brewed coffee tastes like Folgers. Their espresso isn't freshly ground. It comes in little sachets that the "barista" pops into a machine. It isn't even Nespresso quality. Pairing their coffee with their baked goods is like washing down a filet mignon with an old bottle of Boone's Farm.

• Personal Care/Household: they have a decent selection of brands not found elsewhere combined with some mainstream household products. Wouldn't change this.

• Gifts: This is an area where they excel. It is actually fun to shop this section. While most of it is not my personal taste, it's cute and unique.

• Floral: Excellent flowers and plants. Shouldn't change anything.

• Store decor: With the exception of Uptown Plaza (newly-renovated) and 44th/Camelback (contemporary colors/signage), their stores need to be renovated and upgraded. The Tuscan design used in their stores went out of fashion 20 years ago and screams "Old." The maroon, forest green, and deep blues used in others has not held up and looks equally old. There is nothing high-end about outdated, stale design. Admittedly, this is not a "tweak," but it is a necessary investment.

[SamSpade]

Here's some interesting tidbits from the year 2000 in the Phoenix grocery market (emphasis added by me):

Bashas' Inc., Chandler, Arizona's largest privately owned chain with nearly 100 locations, will continue to open five or six stores each year, said public relations assistant Jennifer Honea.

In the Valley, Bashas' opened an AJ's Fine Foods in Chandler this year and a Bashas' at Gold Canyon Ranch. It plans to open another Bashas' in a former Fry's site near 40th Street and Thunderbird Road late this year.

In addition, Bashas' is relocating a Food City from Alma School and Ray Road in Chandler to Arizona Avenue and Ray.

Edit: I thought it had been mentioned in this thread, but it's not, so I will note for posterity, via Sacramento Bee

Bashas’ owns more than 100 stores

So I guess that's interesting. Bashas store count is relatively stable, despite the 2009 bankruptcy.

[arizonaguy]

So I guess that's interesting. Bashas store count is relatively stable, despite the 2009 bankruptcy.

Bashas had gotten up to over 150 stores at the time it filed bankruptcy. It opened these stores organically as well as took over locations that it bought from Southwest Supermarkets, MEGA Foods, ABCO Desert Market, and divested sites from the Fry's / Smith's / Smitty's combination (when Kroger bought Fred Meyer). It was this explosive growth between 2000 and 2009 that caused the bankruptcy (among other things such as the growth of Walmart at the same time and the Great Recession).

[storewanderer]

So I guess that's interesting. Bashas store count is relatively stable, despite the 2009 bankruptcy.

Bashas had gotten up to over 150 stores at the time it filed bankruptcy. It opened these stores organically as well as took over locations that it bought from Southwest Supermarkets, MEGA Foods, ABCO Desert Market, and divested sites from the Fry's / Smith's / Smitty's combination (when Kroger bought Fred Meyer). It was this explosive growth between 2000 and 2009 that caused the bankruptcy (among other things such as the growth of Walmart at the same time and the Great Recession).

Around 2002 Bashas banner around Phoenix already struck me as the lowest hanging fruit in the market. There were a lot of stores. They were terrible stores. They had that red striped wall interior, turntable checkstands, hardly any customers, low staffing, very high prices, and were just really bad when you stacked them up against ANY other grocer- especially a Frys, a Safeway, or an Albertsons. The perimeters looked anemic, floors were dull (needed wax badly), they were pushing the annoying loyalty card with no visitor option other than to sign up, and I was perplexed how they got to be as large of a chain as they did. I made a point to go into AJ's and Food City too. AJ's, while they felt dated even back then, they were a solid operation and I was impressed with how well run the stores were, friendly the employees were, and how high quality the fresh departments were. But that Bashas banner in the "middle" or more mature parts of Phoenix/Tempe/Mesa/Gilbert- they were probably one of the worst chains I had ever come across, at that time. Of course then I got to see some other real similar poor regional chains years later in other regions, then Save Mart did its nosedive after the Albertsons acquisition where it fell into a similar state to what is described above but never quite as bad.

I did see Food City back then as well and came away with the same impression I still have- the format is effective, it works, and it isn't a bad store.

So when I look at Bashas today I see what seems to be a more focused and certainly running better stores vs. what I saw in say 2002. I know they were able to get rid of a lot of bad low volume stores (like those ones I visited above) and keep better stores. Their pricing is better than before and their marketing/merchandising has improved. So Raleys- if they actually want to make a go of it, probably has a good chance with these stores. But Raleys is going to need to be flexible here and keep some of the things Bashas does that are different from Raleys, and maintain stores properly. Not impressed with how Raleys has handled Scolaris in NV except that one Reno store in Caughlin Ranch. The Fernley store looks passable and Tonopah is what it is but the stores in Yerington, Reno Mira Loma/McCarran, and Sak N Save look absolutely terrible- major decline from when they were Scolaris in condition, staffing level, and freshness. And Scolaris was not exactly an outstanding operator- though commendable they lasted as long as they did given all the competition. Well, Scolaris does still have two open stores and are making a go of it.

[storewanderer]

Interesting story here. Probably explains why a lot of those... really not great... stores were kept open too.
https://www.azcentral.com/story/opinion ... 047629001/

[ClownLoach]

Interesting story here. Probably explains why a lot of those... really not great... stores were kept open too.
https://www.azcentral.com/story/opinion ... 047629001/

There aren't going to be enough cost savings from reducing nice, charitable contributions to offset the financing costs of buying this chain. It's some low hanging fruit but that's about it. The problem with mergers and acquisitions these days is that aside from trillion dollar companies like Apple everything is financed. That means interest on the debt. If they could barely afford to keep the floors waxed there is unlikely to be enough leverage generated by combined buying power to offset the long term debt without raising prices and cutting labor. That's why I just don't see this as a long-term transaction. It is a precursor to another one.