Acquisition and Integration of Haggen into Albertsons

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storewanderer
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Re: Acquisition and Integration of Haggen into Albertsons

Post by storewanderer »

Haggen was destroyed because its Top Foods Division got beat out by too many new entries from other lower cost competitors. They built top of the line facilities and had superior quality products but Top Foods was being marketed as a discount store and it was just not a discount compared to a Wal Mart Supercenter, WinCo, or even Fred Meyer by the mid 2000's after Kroger adjusted pricing there. The customers that Top Foods targeted did not care so much about quality they cared more about price. Haggen was simply too small to compete on price, that wasn't what they were all about.

Maybe they also spent too much money on new stores or entered into some less than friendly lease agreements on some of the new stores.
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Re: Acquisition and Integration of Haggen into Albertsons

Post by klkla »

Top Foods was definitely a strategic error. They tried to move into slightly lower income areas and that strategy failed. Comvest initially made all the right decisions. They closed the locations that should have never opened and got the focus back on being an upscale regional grocer. The next logical move would have been to start spending capital to modernize the existing stores but instead they bought the divested Albertsons & Safeway locations and we all know how that turned out.
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Re: Acquisition and Integration of Haggen into Albertsons

Post by storewanderer »

Top Foods probably made sense at the time. Food 4 Less was in Oregon but not in Washington (Fleming franchise stores). WinCo wasn't in Washington at that time either. The discount field was wide open in the 90's in Washington when Haggen built all those Top Stores. I think Top was used to build up volume to help lower costs for the company as a whole. Fred Meyer pricing was pretty high in the 1990's (Safeway had lower prices than they did back then) so a discount format did not have to be all that "discount" to appear cheaper than most of the competition in the northwest and you always had quite a few other stores going the upscale route in WA back then like Larry's, QFC, Uttenburgs, etc.

I also spoke to someone who was in the business for a long time as an independent in WA and was involved in some sort of buying group in the 1990's that he insisted was run by Haggen. I could not get a real clear explanation on it or understand it all the way but it sounded like Haggen was doing some buying and then also selling to independents (that could explain why they had a warehouse despite having such low store count)?
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Re: Acquisition and Integration of Haggen into Albertsons

Post by klkla »

storewanderer wrote:Top Foods probably made sense at the time. Food 4 Less was in Oregon but not in Washington (Fleming franchise stores). WinCo wasn't in Washington at that time either. The discount field was wide open in the 90's in Washington when Haggen built all those Top Stores.
I guess what I'm saying is why go into the discount business at all when your expertise is in upscale service-oriented stores? They were never going to make the kind of profits with Tops that they could have with the Haggen format. They were also too small of a company to gain the kind of pricing leverage they would have needed in the first place. They should have worked harder to find more suitable Haggen locations and stuck to doing what they knew best.
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Re: Acquisition and Integration of Haggen into Albertsons

Post by storewanderer »

I agree with you. They took their eye off the ball with Top Foods when they really had a better upscale format than others had in that market. Others were building little 30,000 square foot boutique like upscale supermarkets (limited or no pharmacy/drug) but those large Haggens were the real thing, a big 60,000+ square foot upscale store with all service offerings and large seating areas to support food service.

Also funny how they bypassed Seattle and suburbs in the 90's with the Haggen format but built stores with the Haggen format in Portland (which was not getting as much upscale competition).

I really think in the 1990's the company was going the passive route and trying to avoid much direct competition with its formats. They did a discount format in a market where others were not doing one (Seattle suburbs) and avoided putting their upscale format there. They did develop their upscale format in Marysville, WA and north (about 40 minutes outside of Seattle) where none of the smaller upscales from Seattle were doing business (QFC back then stopped down in Everett about 15 minutes from Marysville).

Then they did an upscale format (Haggen) down in Portland where nobody else was really doing an upscale format.
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Re: Acquisition and Integration of Haggen into Albertsons

Post by Super S »

Elsewhere on here it has been discussed that Haggen may have at one time been planning to open Cub Foods (franchised) stores in Washington. I do remember a sign posted in Kelso that read "Cub Foods COMING SOON" where TOP Foods (now a Safeway) was ultimately built. Some of the TOP stores did bear similarities to the Cub/ WinCo stores as far as store layout, and I have to wonder if there was a disagreement over the franchise arrangement which led to Haggen going a different direction. This could be part of the reason TOP wasn't really successful.
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Re: Acquisition and Integration of Haggen into Albertsons

Post by rwsandiego »

storewanderer wrote:...They did develop their upscale format in Marysville, WA and north (about 40 minutes outside of Seattle) where none of the smaller upscales from Seattle were doing business (QFC back then stopped down in Everett about 15 minutes from Marysville).

Then they did an upscale format (Haggen) down in Portland where nobody else was really doing an upscale format.
That Marysville store was NICE! As you can imagine, when I heard Haggen was opening in Southern California I was doing a happy dance. The dancing stopped when I walked into the doors of my local Haggen.
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Re: Acquisition and Integration of Haggen into Albertsons

Post by pseudo3d »

So, what's the status on Haggen and Albertsons? Do they still have Haggen-brand products, or is it Signature now?
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Re: Acquisition and Integration of Haggen into Albertsons

Post by lake »

pseudo3d wrote:So, what's the status on Haggen and Albertsons? Do they still have Haggen-brand products, or is it Signature now?
Basing it off of the current Haggen flyer, they are still running the Haggen private label. This is a pretty good private label so Albertsons is probably holding onto it for the time being.
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Re: Acquisition and Integration of Haggen into Albertsons

Post by kr.abs.swy »

If Albertsons can't be bothered to maintain separate private label for chains with hundreds of stores like Albertsons, Safeway, Vons, etc., I will be shocked if the Haggen label lasts for very long.

As a side note, not having separate private label in at least the largest chains Albertsons, Safeway, Vons, Jewel, etc. seems very lazy to me. I do understand that there are some marginal cost savings to be achieved. But it also has the effect of homogenizing these chains. If smaller chains like Raley's can maintain their own private label, Albertsons should be able to do the same. Even if they just did what Fred Meyer does, where the majority of products are Kroger but some Fred Meyer labels survive, it would help.
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