Price Chopper/Market 32 for sale

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TW-Upstate NY
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Re: Price Chopper/Market 32 for sale

Post by TW-Upstate NY » November 30th, 2016, 3:31 pm

Knight wrote:Price Chopper selling itself to Albertson's removes another participant from the northeastern United States.
As part of the overall scheme of things, yes that's true BUT this area could finally see its first Wegman's if the sale goes through. Pure speculation on my part but there is that urban legend about some sort of gentlemen's agreement between PC and Wegman's about not competing in the other's home market. Wouldn't surprise me at all if Albertson's would in turn then sell some stores to Wegman's.

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Re: Price Chopper/Market 32 for sale

Post by pseudo3d » November 30th, 2016, 4:43 pm

TW-Upstate NY wrote:
Knight wrote:Price Chopper selling itself to Albertson's removes another participant from the northeastern United States.
As part of the overall scheme of things, yes that's true BUT this area could finally see its first Wegman's if the sale goes through. Pure speculation on my part but there is that urban legend about some sort of gentlemen's agreement between PC and Wegman's about not competing in the other's home market. Wouldn't surprise me at all if Albertson's would in turn then sell some stores to Wegman's.
Like I said, I think full sales are unlikely since Wegmans stores are so much bigger than anything Price Chopper has on average (new stores are 130k, 140k square feet, whereas Price Chopper has more modest stores that top out at 90k). With Price Chopper functionally out of the picture, though, it would be a green light for Wegmans to move in and build.

...that is, if it happens at all.
Last edited by pseudo3d on November 30th, 2016, 4:54 pm, edited 1 time in total.

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Re: Price Chopper/Market 32 for sale

Post by klkla » November 30th, 2016, 4:53 pm

TW-Upstate NY wrote: Wouldn't surprise me at all if Albertson's would in turn then sell some stores to Wegman's.
Why would Albertson's want to compete with Wegman's?

Albertson's has a pretty good history of selling stores required for divestiture to companies that are likely to fail, not companies that would kick their butt.

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Re: Price Chopper/Market 32 for sale

Post by pseudo3d » November 30th, 2016, 7:49 pm

klkla wrote:
TW-Upstate NY wrote: Wouldn't surprise me at all if Albertson's would in turn then sell some stores to Wegman's.
Why would Albertson's want to compete with Wegman's?

Albertson's has a pretty good history of selling stores required for divestiture to companies that are likely to fail, not companies that would kick their butt.
Not sure how one acquisition makes for a "pretty good history" (even if you include Lawrence Brothers for United, while they did acquire some stores of theirs, the company and their acquired stores are alive and well today).

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Re: Price Chopper/Market 32 for sale

Post by klkla » December 1st, 2016, 8:51 am

pseudo3d wrote:
klkla wrote:
TW-Upstate NY wrote: Wouldn't surprise me at all if Albertson's would in turn then sell some stores to Wegman's.
Why would Albertson's want to compete with Wegman's?

Albertson's has a pretty good history of selling stores required for divestiture to companies that are likely to fail, not companies that would kick their butt.
Not sure how one acquisition makes for a "pretty good history" (even if you include Lawrence Brothers for United, while they did acquire some stores of theirs, the company and their acquired stores are alive and well today).
I'm obviously referring to the Haggen and Minyard transactions. Albertson's does not seek out well run companies to buy stores they are required to sell (for obvious reasons) so I see no reason why they would want to sell stores to a company that is one of the best supermarket operators in the country. It makes no sense.

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Re: Price Chopper/Market 32 for sale

Post by pseudo3d » December 1st, 2016, 9:56 pm

klkla wrote:
pseudo3d wrote:
klkla wrote:
Why would Albertson's want to compete with Wegman's?

Albertson's has a pretty good history of selling stores required for divestiture to companies that are likely to fail, not companies that would kick their butt.
Not sure how one acquisition makes for a "pretty good history" (even if you include Lawrence Brothers for United, while they did acquire some stores of theirs, the company and their acquired stores are alive and well today).
I'm obviously referring to the Haggen and Minyard transactions. Albertson's does not seek out well run companies to buy stores they are required to sell (for obvious reasons) so I see no reason why they would want to sell stores to a company that is one of the best supermarket operators in the country. It makes no sense.
Frankly, it would've been a tough sell for anyone else, and too many of those stores are probably ones that should've closed. (This isn't just an Albertsons problem, 40% of the A&P stores went unused for new retailers). The real reason I think is Wegmans wouldn't want them anyway. They are all too small for its format, and the last thing a chain wants is a bunch of tiny, inferior stores diluting what they've built. It would be interesting that if they do divest, how they'll do it. The East Coast market is different than West Coast, so maybe it will be a more varied mix that could include Ahold Delhaize, Tops, and Big Y.

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Re: Price Chopper/Market 32 for sale

Post by BillyGr » December 2nd, 2016, 1:12 pm

pseudo3d wrote: Frankly, it would've been a tough sell for anyone else, and too many of those stores are probably ones that should've closed. (This isn't just an Albertsons problem, 40% of the A&P stores went unused for new retailers). The real reason I think is Wegmans wouldn't want them anyway. They are all too small for its format, and the last thing a chain wants is a bunch of tiny, inferior stores diluting what they've built. It would be interesting that if they do divest, how they'll do it. The East Coast market is different than West Coast, so maybe it will be a more varied mix that could include Ahold Delhaize, Tops, and Big Y.
The only thing that might occur with Wegmans would depend on the store locations, what else is available and what (if any) space exists - for instance if one of the 90,000 Sq. Ft. stores was in an area they were interested in and couldn't get a new building (no land or issues building with the town), buying that one would make sense if it was on a property where they could add the extra 30-50,000 Sq. Ft. to bring it up to their standard size (which could be easier to get permission for an addition vs. an entirely new building).
Also - while Wegmans generally has built these large stores as they have expanded outward, they DO have experience running smaller stores in their "home" market (which is also similar to PC itself, as they have maintained many small stores in the greater Albany area that most chains would have left some time ago).

As to the others, I wouldn't think Ahold/Delhaize would have much involvement, just because most of the Price Chopper areas already have either Hannaford or Stop & Shop in them (not sure on PA if any of the Giant there is in the PC area) so it would seem to be hard for them to buy. The other two seem more possible (Tops being the most logical) to take ones that would need to be sold off.

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Re: Price Chopper/Market 32 for sale

Post by pseudo3d » December 2nd, 2016, 1:48 pm

BillyGr wrote:
pseudo3d wrote: Frankly, it would've been a tough sell for anyone else, and too many of those stores are probably ones that should've closed. (This isn't just an Albertsons problem, 40% of the A&P stores went unused for new retailers). The real reason I think is Wegmans wouldn't want them anyway. They are all too small for its format, and the last thing a chain wants is a bunch of tiny, inferior stores diluting what they've built. It would be interesting that if they do divest, how they'll do it. The East Coast market is different than West Coast, so maybe it will be a more varied mix that could include Ahold Delhaize, Tops, and Big Y.
The only thing that might occur with Wegmans would depend on the store locations, what else is available and what (if any) space exists - for instance if one of the 90,000 Sq. Ft. stores was in an area they were interested in and couldn't get a new building (no land or issues building with the town), buying that one would make sense if it was on a property where they could add the extra 30-50,000 Sq. Ft. to bring it up to their standard size (which could be easier to get permission for an addition vs. an entirely new building).
Also - while Wegmans generally has built these large stores as they have expanded outward, they DO have experience running smaller stores in their "home" market (which is also similar to PC itself, as they have maintained many small stores in the greater Albany area that most chains would have left some time ago).

As to the others, I wouldn't think Ahold/Delhaize would have much involvement, just because most of the Price Chopper areas already have either Hannaford or Stop & Shop in them (not sure on PA if any of the Giant there is in the PC area) so it would seem to be hard for them to buy. The other two seem more possible (Tops being the most logical) to take ones that would need to be sold off.
I seem to recall reading that the smaller Wegmans stores were legacy ones before their average store size went supernova, and kept because they did well and were not competing with the big ones. However, that's not the case here, if they're looking to expand to a new market, they're going to want a 100,000+ square foot store, and neither Wegmans nor their customers want some 60,000 square foot hand-me-down.

As for PA, the stores seem to be prominently in the Scranton/Wilkes-Barre area, and fiddling around with Google Earth shows that despite coming pretty close, ACME and Price Chopper do not overlap. The VT/MA on the other hand does have Shaw's overlap. As for "not selling to failing companies", when Safeway and Albertsons merged, the goal was to find companies that could accept the unionized stores in the West Coast. Problem is, when you took Safeway and Albertsons out of the equation, there weren't a lot of stores that were even eligible. Neither Ralphs nor Stater Bros., two of the eligible candidates, decided to go for it. They have shown that they are not interested in expanding.

The other markets faced similar difficulties. Arizona was dominated by Fry's, which had its own better stores in nearby locations and not interested, and Bashas' was not in expansion mode. In Dallas--similar issue, H-E-B wasn't in town and wasn't interested in expanding Central Market (they took two of the stores, ultimately), and Kroger ALSO usually had better stores (they took one store, ultimately).

When Royal Ahold and Delhaize merged, the goal was to find companies that could accept the unionized stores in the East Coast, and that worked. There were a greater part of the stores were not unionized unlike Albertsons and Safeway, allowing them to sell stores to Publix or Weis, and the pool that were unionized were larger, like ACME or Tops Markets. Price Chopper is not unionized, it's on the "boycott list" of UFCW 1500, which means that Albertsons would have greater leeway in the available candidates, and that list would include Royal Ahold, Tops, Big Y, or even ShopRite. It's doubtful that Royal Ahold would want to expand at this point, at least significantly.

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Re: Price Chopper/Market 32 for sale

Post by klkla » December 2nd, 2016, 5:56 pm

pseudo3d wrote: As for "not selling to failing companies", when Safeway and Albertsons merged, the goal was to find companies that could accept the unionized stores in the West Coast. Problem is, when you took Safeway and Albertsons out of the equation, there weren't a lot of stores that were even eligible. Neither Ralphs nor Stater Bros., two of the eligible candidates, decided to go for it. They have shown that they are not interested in expanding.
This has been discussed before. Neither Ralphs or Stater Bros. were even given the chance to bid on the stores when they were worth bidding for. Albertson's approached Haggen and there is no evidence that they even looked at any competing bids. Jack Brown of Stater Bros. even stated publicly that they were interested in some of the stores when Albertson's and Safeway first announced their merger.

And there's no evidence to support your statement that their 'goal' was to look for companies that would accept unionized stores. If you look at past mergers in Southern California (Vons/Safeway, Albertson's/Lucky, Ralphs/Hughes) that happened when the unions were much stronger the stores were sold individually with the best stores going to the established unionized chains in the area and the lower volume stores going to Unified Grocers and mostly non-union independents. Everyone assumed that would happen in this case but obviously Albertson's had a different idea and specifically sought out Haggen, Minyard and even SuperValu to buy stores knowing that they would fail. It's still amazing to me to this day that the FTC let them get away with it.

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Re: Price Chopper/Market 32 for sale

Post by pseudo3d » December 2nd, 2016, 6:31 pm

klkla wrote:
pseudo3d wrote: As for "not selling to failing companies", when Safeway and Albertsons merged, the goal was to find companies that could accept the unionized stores in the West Coast. Problem is, when you took Safeway and Albertsons out of the equation, there weren't a lot of stores that were even eligible. Neither Ralphs nor Stater Bros., two of the eligible candidates, decided to go for it. They have shown that they are not interested in expanding.
This has been discussed before. Neither Ralphs or Stater Bros. were even given the chance to bid on the stores when they were worth bidding for. Albertson's approached Haggen and there is no evidence that they even looked at any competing bids. Jack Brown of Stater Bros. even stated publicly that they were interested in some of the stores when Albertson's and Safeway first announced their merger.
Talking about it doesn't mean that they actually pursued it. There were once rumors that Sears Holdings would buy Safeway that caused Safeway's stock price to jump, but I doubt someone from SHLD actually talked to anyone from Safeway about it at all. Besides, the list of stores to be divested wasn't even announced yet, and I'm pretty sure Stater Bros. isn't bitter about it. As for the competing bids, we know that were three (Comvest, Zell, and Oaktree Capital Management)--they weren't mentioned in the Haggen suit because it would undermine their case that they got bilked, and the complaint was written to avoid confirming or denying that the other two bidders existed. Officially, we don't know that.
And there's no evidence to support your statement that their 'goal' was to look for companies that would accept unionized stores. If you look at past mergers in Southern California (Vons/Safeway, Albertson's/Lucky, Ralphs/Hughes) that happened when the unions were much stronger the stores were sold individually with the best stores going to the established unionized chains in the area and the lower volume stores going to Unified Grocers and mostly non-union independents. Everyone assumed that would happen in this case but obviously Albertson's had a different idea and specifically sought out Haggen, Minyard and even SuperValu to buy stores knowing that they would fail. It's still amazing to me to this day that the FTC let them get away with it.
Admittedly, I couldn't find anywhere where they stated that goal, I do know Haggen continued to honor contracts, but that doesn't rule out that either...when Albertsons bought back some stores, who were the biggest champions in favor of that? The unions. So, we may never know. But, even if that wasn't the case, are there any other full-service mid-line supermarkets that would've been able to take on the stores? I can't think of any.

In any case, I don't see any lasting evidence that they'll pull those shenanigans if they acquire Price Chopper (which, btw, is far from official if it's happening at all).

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