Gelsons in former Haggen Stores

[veteran+]

Thanks for that report!

I was very curious as to how Gelson's (I'm a fan) would manage such an unfamiliar large space!

I hope someone visits the Gelson's in Rancho Mirage (formerly Pavilions then Gelson's).

That used to be a high volume Pavilions store (for the desert). Upper middles class to very wealthy neighborhood. Also hard to please and unusually High Maintenance type customers.

I visited the Gelson's in Rancho Mirage at about 2:00 in the afternoon on the Saturday after Thanksgiving.

When I first walked in they had five checkstands open each with one customer. There was a fairly decent amount of traffic in the deli, bakery, pharmacy and liquor areas but the grocery aisles were completely empty, but pristine. The weekend after Thanksgiving is notoriously slow so I couldn't really make a judgement about the overall health of the store.

They are definitely struggling to fill up the amount of space and there were large areas with no product displays at all. They do have numerous signs pointing to improvements to come with this remodel which include the wine and craft beer bar I mentioned in the other thread, a new service cheese shop, Wolfgang Puck Pizza & Salad restaurant, a Raw Bar and expanded Service Deli among other things.

Thanks for your report!

So I presume that the right side entrance area is still huge?

And also the left side HUGE floral department is still present?

Sorry to bother but that was my store at one time. During season we did $750,000.00

[klkla]

Thanks for your report!

So I presume that the right side entrance area is still huge?

And also the left side HUGE floral department is still present?

Sorry to bother but that was my store at one time. During season we did $750,000.00

The floral department is still at the left entrance. It still looks pretty much like the typical Safeway Lifestyle floral department.

There was a lot of empty space near the front right entrance. They removed the service desk that would have been there and spread apart the HABA aisles.
The diagram for the upcoming remodel shows that the Cheese Shop will be going in this space.

[klkla]

I was in the Gelson's that was a former Haggen location in Ladera Ranch on Saturday night at 5:45 PM. All the signs that were up previously about the upcoming remodel have been taken down and they have taken down the temporary vinyl banners and replaced them with a permanent decor package that looks really nice.

However, the store did not seem to be doing very well despite the fact it was in a busy shopping center. I think this is all the remodeling the store will get. The only changes they made were adding a small olive bar in the deli, switching out the Starbucks for Peets Coffee and adding a soup & salad bar near the service deli.

Other than that the store is set up exactly like a late 90's Pavilions. The HABA section is set up exactly the same as what Vons was doing before the Albertsons take-over utilizing low rise shelving with light fixtures built into them.

The bakery looked beautiful but nobody was working the department. I saw two customers waiting for someone to come out but they just left with out buying anything.

The service deli had one person working and she had to go in the back to find something for a customer for at least five minutes. I and the other customers that hadn't been helped just left instead of waiting for her to comeback.

There were two cashiers open when I got to the front-end but one of the cashiers left to have a personal conversation with another employee at the service desk and I was stuck behind a lady with full cart of groceries who decided to go back in the store and get more items. Finally after about three minutes the cashier having the personal conversation noticed me and opened her register.

It will be interesting to see if this store makes it. They are building another store about two or three miles down the road that should open in a couple months. My guess is they will close this store within the next year if they can't build up sales volume.

[HelloOutThere]

I was rather surprised when the Carlsbad Haggen went to Gelson's, as Carlsbad didn't seem sufficiently upscale to support a Gelson's, particularly given DelMar is not that far away. My guess is they thought it would draw from Olivenhain, Encinitas, and LaCosta. What they didn't consider was Cardiff Seaside market, which has a cult following up and down the North County Coastal area, and the Whole Foods Market that opened in downtown Encinitas.

One other thing to consider: no one who works is in Carlsbad at 5:00 - they are stuck in traffic. That said, Carlsbad doesn't seem like a good fit for Gelsons.

I agree with this. I grew up in the the La Costa neighborhood of Carlsbad and my parents still live less than a mile from this store. The newer parts of Carlsbad / La Costa and Encinitas look quite upscale, as everything is master-planned and manicured and the homes are all new and generously sized. But most people in the area are working folks, and many are house-poor. There's some flashy new money, but the real money is in Rancho Santa Fe, La Jolla, and to a certain extent Del Mar (though less so). Not trying to make sweeping generalizations, of course, but that's my 'hood so I know it pretty well.

I think people in Carlsbad like having the Gelson's there as it's much more upscale than Albertson's, and that adds to the upscale IMAGE of the community, but in reality folks do most of their shopping at Costco, Stater Bros., and Wal-Mart.

[storewanderer]

I went to the Pacific Beach Gelsons yesterday afternoon. This store was fully and well remodeled and looks fantastic. They have a really nice perimeter going on in a small space in that store. Floral has been moved to the sidewalk (including floral prep). They squeezed in a hot food bar and salad bar. I think deli and seafood are both larger than before and I don't quite know how they did that. The store was quite busy (parking lot almost full, but it is a small lot) and the perimeter was fully stocked and looked quite fresh.

I wanted to purchase from bakery and I stood at the unstaffed counter for about four minutes. There was a cashier on the end register about six feet from bakery who was facing me the whole time and nobody was ever paged, she had a couple customers during that time but was also idle for part of it. Finally another employee (on break) walked past that cashier when she was idle and he stood behind me. She said to HIM, "do you need something there?" He said, "yes." So she then paged "service first to bakery" (why are we still using Albertsons page phrases)? It took about two minutes for an employee to appear and she assisted me and was friendly enough, but I can't help but feel I was ignored and I would have been standing there a lot longer had the employee who wanted to buy something not come and stood behind me.

The quality of what I purchased from bakery was very good, but not really worth the price they charged (almost double what Ralphs charges for the same thing and to be honest the Ralphs comparable item is just as good).

Based on most of these messages and my experiences, I think Gelsons is suffering from the Haggen problem: prices are too high, perception of quality is not really there, and there are some customer service problems. Pacific Beach is a bright spot but it is also a store of less than 15,000 square feet. I think Gelsons expertise is in running small to medium sized stores in dense areas of very wealthy customers, not running 55,000 square foot combination food and pharmacy stores in middle to upper middle class areas.

I didn't call it out in my initial post, but frankly I do not expect the Carlsbad store to make it. Del Mar looks like it might make it, and Pacific Beach looks solid.

[veteran+]

I went to the Pacific Beach Gelsons yesterday afternoon. This store was fully and well remodeled and looks fantastic. They have a really nice perimeter going on in a small space in that store. Floral has been moved to the sidewalk (including floral prep). They squeezed in a hot food bar and salad bar. I think deli and seafood are both larger than before and I don't quite know how they did that. The store was quite busy (parking lot almost full, but it is a small lot) and the perimeter was fully stocked and looked quite fresh.

I wanted to purchase from bakery and I stood at the unstaffed counter for about four minutes. There was a cashier on the end register about six feet from bakery who was facing me the whole time and nobody was ever paged, she had a couple customers during that time but was also idle for part of it. Finally another employee (on break) walked past that cashier when she was idle and he stood behind me. She said to HIM, "do you need something there?" He said, "yes." So she then paged "service first to bakery" (why are we still using Albertsons page phrases)? It took about two minutes for an employee to appear and she assisted me and was friendly enough, but I can't help but feel I was ignored and I would have been standing there a lot longer had the employee who wanted to buy something not come and stood behind me.

The quality of what I purchased from bakery was very good, but not really worth the price they charged (almost double what Ralphs charges for the same thing and to be honest the Ralphs comparable item is just as good).

Based on most of these messages and my experiences, I think Gelsons is suffering from the Haggen problem: prices are too high, perception of quality is not really there, and there are some customer service problems. Pacific Beach is a bright spot but it is also a store of less than 15,000 square feet. I think Gelsons expertise is in running small to medium sized stores in dense areas of very wealthy customers, not running 55,000 square foot combination food and pharmacy stores in middle to upper middle class areas.

I didn't call it out in my initial post, but frankly I do not expect the Carlsbad store to make it. Del Mar looks like it might make it, and Pacific Beach looks solid.

Wow, it seems current empirical evidence suggests that perhaps Gelson's has reached its Peter's Principle?

My experiences with Gelson's (and previously Mayfair) in W. Hollywood, Hollywood and N. Malibu have always been positive, in all ways.

Could Gelson's be evolving into the inferior value standard like Jensen's in the Coachella Valley?

Very high prices and great quality but POOR service (inclusive of attitude and tone)?

Very disturbing for Gelson's future.

[klkla]

Wow, it seems current empirical evidence suggests that perhaps Gelson's has reached its Peter's Principle?

My experiences with Gelson's (and previously Mayfair) in W. Hollywood, Hollywood and N. Malibu have always been positive, in all ways.

Could Gelson's be evolving into the inferior value standard like Jensen's in the Coachella Valley?

Very high prices and great quality but POOR service (inclusive of attitude and tone)?

Very disturbing for Gelson's future.

I think the problem is they expanded too fast and have had a lot of management turn over in addition to hiring a lot of new managers from outside the company that have not been a part of Gelson's service culture before. They went from 18 to 25 stores in less than a year which is a 39% growth rate. Also during that period they conducted two major remodels (Pacific Beach before opening and Silver Lake which just had it's grand reopening). They also opened a brand new distribution center during this time near La Habra.

Next year they will complete 6 major remodels and open two new stores (Thousand Oaks which is a former Haggen and a new build in Rancho Mission Viejo). In 2018 they are on track to open new stores in Hollywood and Manhattan Beach.

During all this activity they have managed to maintain product quality and store standards for the most part but will have to get back to basics as far as getting their staff and management back to the level of service they were at previously. I Think they will do it. I was in the Silver Lake store on Sunday evening and it was packed. I would estimate about 200 customers in the store with every cash register open. The new/remodeled stores that have received the 'full Gelson's treatment' over the last couple years are all doing really well.

They just seem to be struggling with the stores purchased from Haggen that have not yet received the full remodel. It appears that two of those stores are not likely to get that remodel anytime soon and might be candidates for closure in the coming years. It will be interesting to see which stores get the full remodels this year and which get the "Ladera Ranch-type" remodel which basically consisted of just a new decor package and a couple new deli, bakery and produce cases.

[storewanderer]

I suspect Gelsons wants to make these stores work and they will work hard to make them work. Maybe a couple cases will come where they won't work. The recent additional expansion of Gelsons is a little bit curious as the chain was rather sleepy for quite a few years. But they were a much larger chain in the distant past as Mayfair so it is not like they are going from 18 stores to 160 stores all at once.

There are some opportunities too. For instance if Gelsons decides they like the pharmacy business they can probably add pharmacy to some of their other stores since those stores do not always share a drug anchor tenant. By the same token if Gelsons decides they do not like pharmacy they could sell the pharmacy locations off to someone else, maybe even downsize some stores and let a CVS or something open in the unused space. That sort of thing would also bring more foot traffic to the parking lots that is looking for cheap beer and maybe they will go into the Gelsons and buy some meat or a sandwich.

[CalItalian]

I also will add while I was in the store, there were at least four unattended restocking projects going on within the first five or six grocery aisles immediately following produce. Unattended U -Boats, piles of boxes, cart fulls of goods sitting at random...

Gelson's stocking crews generally work from 2 pm - 11 pm instead of graveyard shifts like at other stores. They break the loads down in the back and then each stocker brings one U-Boat at a time to work his aisle. They are frequently called up to work as cashiers when busy which is probably why you saw an unattended u-boat. After working the U-Boat the stocker will immediately face his aisle. All Gelson's are faced numerous time during the day to keep the store pristine.

I don't see any stores stocking during graveyard anymore. I'm actually annoyed that they stock during the day even at peak early evening hours.

[storewanderer]

In the Carlsbad Gelsons there was only one checkstand with customers at any given time (2 lit up as open), but I did see a few "packs" of 2-3 employees together talking around the front end and around the manager podium. I guess some of those were the stockers. And it was a mess all over. Boxes on the floor, etc. Carts full of boxes/items...