Albertsons IPO (again)

[Bagels]

It seems like every time they try to IPO, some factor happens that is completely out of their control that screws it up. Ironically, Cornoavirus is great for the grocers. People are eating out less and stocking up like crazy in the stores. Sales numbers should skyrocket.

No doubt sales are looking good, but from my observations, most people are stocking up on specific items; e.g. bottled water and canned goods -- they're not purchasing their usual baskets. At both Albertsons I was in yesterday and today, the amount of items available in the deli and bakery was greater than usual. I asked an employee if they were making/stocking more, and she said no, it was that nobody was buying them. Obviously these are the higher margin items, and they're not moving

[storewanderer]

It seems like every time they try to IPO, some factor happens that is completely out of their control that screws it up. Ironically, Cornoavirus is great for the grocers. People are eating out less and stocking up like crazy in the stores. Sales numbers should skyrocket.

No doubt sales are looking good, but from my observations, most people are stocking up on specific items; e.g. bottled water and canned goods -- they're not purchasing their usual baskets. At both Albertsons I was in yesterday and today, the amount of items available in the deli and bakery was greater than usual. I asked an employee if they were making/stocking more, and she said no, it was that nobody was buying them. Obviously these are the higher margin items, and they're not moving

I noticed this in every single store I was in today. Bakery/deli departments were full in every store and while people were shopping those areas, they were not the mob scene the rest of the store was. This was especially noticeable in Save Mart who usually has hardly anything out. I think they put more out in response to the increased customer counts.

I think, especially at the high prices these large chain grocers charge, the margins on a lot of regular price center store items are likely really good and as that stuff moves out it should make it so center store produces the margin that is being lost in bakery/deli from less activity/shrink. People are clearing the shelves of center store items that have current prices 2-3x higher than a Wal Mart, WinCo, or Target price and I have to think the chains are making a ton of money in this environment.

It may be time for the grocers to establish some "return policy" guidelines.

[Bagels]

I noticed this in every single store I was in today. Bakery/deli departments were full in every store and while people were shopping those areas, they were not the mob scene the rest of the store was. This was especially noticeable in Save Mart who usually has hardly anything out. I think they put more out in response to the increased customer counts.

I think, especially at the high prices these large chain grocers charge, the margins on a lot of regular price center store items are likely really good and as that stuff moves out it should make it so center store produces the margin that is being lost in bakery/deli from less activity/shrink. People are clearing the shelves of center store items that have current prices 2-3x higher than a Wal Mart, WinCo, or Target price and I have to think the chains are making a ton of money in this environment.

It may be time for the grocers to establish some "return policy" guidelines.

After I wrote my previous posting, I revisited two Albertsons and both were now out of most all food products... except the bakery/deli. So I agree with you, although additional labor costs will eat into the profits -- both excessive overtime up front, and additional time spent cleaning and re-stocking the stores. I believe that once the hysteria dies down, sales will plummet, and the stores will be behind their goals.

I thought I'd pick up a ton of Monopoly tickets tonight, given that most people don't play the game and cashiers tend to give out large handfuls in the evening... but both stores were completely out. Sad.

[klkla]

People are clearing the shelves of center store items that have current prices 2-3x higher than a Wal Mart, WinCo, or Target price

Are you saying that the chains are price gouging? Or are you saying that the supermarket chains always charge 2-3x higher for center store items?

In other words if WalMart charges $1.99 for a can of beef stew, the chains are charging $3.98 to $5.97 for the exact same item? I find that hard to believe.

[storewanderer]

People are clearing the shelves of center store items that have current prices 2-3x higher than a Wal Mart, WinCo, or Target price

Are you saying that the chains are price gouging? Or are you saying that the supermarket chains always charge 2-3x higher for center store items?

In other words if WalMart charges $1.99 for a can of beef stew, the chains are charging $3.98 to $5.97 for the exact same item? I find that hard to believe.

I don't call it price gouging but it is just the everyday price structure of the major grocers on many items and has been for decades, this is why they've lost so much share to Wal Mart and Winco. Do you think people actually enjoy the shopping experience at Wal Mart and Winco? It is price price price. Look at many branded canned goods like soup, tomato sauce, pasta sauce, and similar and you will see. A few examples little 8 ounce Hunts tomato sauce is .50 at Wal Mart and Winco and has been for over a year (before that it was .44) and many major grocers are over $1 for that. Similar on canned soups like Chunky and Progresso with major grocers at 3.29+ for that and Wal Mart and Winco charging prices ranging between 1.28 and 1.78 on an everyday basis. Many more examples you can go see for yourself, just look what doesn't sell at the major grocers.

[Bagels]

People are clearing the shelves of center store items that have current prices 2-3x higher than a Wal Mart, WinCo, or Target price

Are you saying that the chains are price gouging? Or are you saying that the supermarket chains always charge 2-3x higher for center store items?

In other words if WalMart charges $1.99 for a can of beef stew, the chains are charging $3.98 to $5.97 for the exact same item? I find that hard to believe.

I don't call it price gouging but it is just the everyday price structure of the major grocers on many items and has been for decades, this is why they've lost so much share to Wal Mart and Winco. Do you think people actually enjoy the shopping experience at Wal Mart and Winco? It is price price price. Look at many branded canned goods like soup, tomato sauce, pasta sauce, and similar and you will see. A few examples little 8 ounce Hunts tomato sauce is .50 at Wal Mart and Winco and has been for over a year (before that it was .44) and many major grocers are over $1 for that. Similar on canned soups like Chunky and Progresso with major grocers at 3.29+ for that and Wal Mart and Winco charging prices ranging between 1.28 and 1.78 on an everyday basis. Many more examples you can go see for yourself, just look what doesn't sell at the major grocers.

I think kikla misunderstood your point, which is that people are paying whatever the shelf price is, without regards to the competition. Most basic canned goods (e.g. canned vegetables, basic canned soup, etc.) is priced at two to three times the cost of Walmart. Of course, this is because Walmart uses an "everyday low price" strategy, whereas Albertsons sticks to the classic "six week" sale cycle.

xxx

Last month, the huge Albertsons in Irvine (I believe this store was planned as a Smith's, but it opened as a Lucky in the mid-90s) cleared a large section of the store and used it to hawk overstocks (likely from the nearby Irvine distribution center). The way they set it up was pretty trashy -- mostly stuff in boxes scattered across shelves, tables and the floor. It was mostly private label merchandise -- lots of seasonal items, including tons of traditional Thanskgiving/Christmas dinner items. There was also a lot of Value Corner products that I presume are no longer being carried.

Anyway, I was betting I'd be seeing Signature Select Peppermint Coffee until late in the year... but when I went into the store this morning, everything -- and I mean everything -- was gone.

[BillyGr]

Also very likely one other factor that plays into bakery/deli items:

If you are buying more than usual, to be prepared in case you can't go shopping for a week or two, it doesn't make much sense to buy too much extra from these categories as most of the items have a more limited shelf life. While many can be frozen, not everyone would have space or know that they could do so.

So it makes more sense to buy 3 weeks worth of canned soup, vegetables or other non perishables.

[storewanderer]

I've never seen anything like that in NorCal (a store with close outs). Maybe the division is moving enough product to not have to worry about that sort of thing in a manner where they would have to go to such a measure. I do see them, from time to time, have certain items that are in high supply and expire in a month or two on endcaps at attractive prices at all locations and the shelf tags say "overstock clearance." Smiths does something similar with certain regular sale shelf tags but usually their items have a 90 day expiration window, so I don't think much of that.

[Bagels]

I've never seen anything like that in NorCal (a store with close outs). Maybe the division is moving enough product to not have to worry about that sort of thing in a manner where they would have to go to such a measure. I do see them, from time to time, have certain items that are in high supply and expire in a month or two on endcaps at attractive prices at all locations and the shelf tags say "overstock clearance." Smiths does something similar with certain regular sale shelf tags but usually their items have a 90 day expiration window, so I don't think much of that.

I was incredibly surprised to see it. They also had an entire freezer and dairy case comprised of it as well. In the past, it was pretty common to see Albertson's private label products at places like Grocery Outlet and 99 Cent Only. I don't frequent Grocery Outlet, but when I was in there last month, they had a pretty large stock of Value Corner products, although most of it was non-food (e.g. laundry detergent) and could've been older stock. But I do frequent 99 Cent Only (the nerd in me loves to see what's being cleared out; I don't buy much from there) and it's incredibly rare these days to see Alberton's private label stuff in there. Up until last year, they were supplying milk and juice to them under the legacy "Jerseymaid" banner. I suspect the only Alberton's is trying to protect its brands, and the only private label products being sold at the 99 today are direct from the product manufactures, similar to how Giant Eagle, Meijer, etc. products are carried.

I love Kroger's in-store overstocks, because they're often sold at huge discounts (e.g. a pint of heavy whipping cream being sold at 49c, a box of sandwhich bags beings sold for the same price, etc.) When I was in Grocery Outlet last month, they had tons of Kroger-branded products throughout the store (including meat, produce and bakery) so it appears Kroger is dumping excess warehouse inventory onto liquidators. Given that this stuff is moved at pennies on the dollar, Albertsons may be desperate to make more revenue off of it by liquidating it in-house.

[SamSpade]

Latest update from MarketWatch:
It's here: Albertsons Files for IPO