the Big Grocers in WA

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the Big Grocers in WA

Post by SamSpade »

OK... I had a free afternoon and mirrored what The Oregonian did for Oregon.
I did not seem to have the knowledge to make the little 1 mile radius piece though.

But, this gives you an idea of where Kroger and where Albertsons do business across the state in 2022:
https://www.google.com/maps/d/edit?mid= ... sp=sharing
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Re: the Big Grocers in WA

Post by storewanderer »

That is a really ugly overlap situation. I estimate 100 Safeway-level of volume stores need to be divested in WA.

100 stores is enough for a new chain to have plenty of locations.

If they divest the little lower volume QFCs, maybe more stores need to be divested. I won't even mention Fred Meyer because I anticipate 0 divested Fred Meyers.
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Re: the Big Grocers in WA

Post by Super S »

SamSpade wrote: October 26th, 2022, 6:50 pm OK... I had a free afternoon and mirrored what The Oregonian did for Oregon.
I did not seem to have the knowledge to make the little 1 mile radius piece though.

But, this gives you an idea of where Kroger and where Albertsons do business across the state in 2022:
https://www.google.com/maps/d/edit?mid= ... sp=sharing
There is an Albertsons-turned-Safeway not marked on there, across from the Tumwater Fred Meyer.
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Re: the Big Grocers in WA

Post by storewanderer »

Super S wrote: October 27th, 2022, 5:54 pm
SamSpade wrote: October 26th, 2022, 6:50 pm OK... I had a free afternoon and mirrored what The Oregonian did for Oregon.
I did not seem to have the knowledge to make the little 1 mile radius piece though.

But, this gives you an idea of where Kroger and where Albertsons do business across the state in 2022:
https://www.google.com/maps/d/edit?mid= ... sp=sharing
There is an Albertsons-turned-Safeway not marked on there, across from the Tumwater Fred Meyer.
That store seems to be doing a lot better as Safeway, than it did as Albertsons. Can't believe they kept the 1995 Albertsons floor in most of the store with the gray splash design.

I see they have still kept one (much nicer) store in Olympia branded Albertsons...
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Re: the Big Grocers in WA

Post by VibeGuy »

This map is really useful. There’s a couple omissions:
Poulsbo, WA - built as a Safeway
Kingston, WA - reflagged from Alb
Steilacoom Blvd, Lakewood WA - also a reflag
Bellingham, WA - the lone Safeway

The overlap in Oak Harbor isn’t quite as bad as the map indicates - the Safeway dot is in their old location or the fuel center in the Haggen lot. The actual Safeway is a few hundred feet away by air and a bit longer by road, to the southwest.

There’s at least one dead Safeway shown - Tacoma 6th Avenue has been redeveloped into a Winco.

What would be more telling about how bad the duopoly is at present is to show the conventional grocer and superstore competition. There are huge population masses where you drive past five duopolist locations to get to one actual competitor.

The options available to outright pick up in Seattle city limits are pretty much the Rainier Valley/Beach and Columbia Valley, geos where QFC left years ago and the Safeways are nothing spectacular. Tacoma/Pierce County other than Puyallup, you might be able to argue that the overlap isn’t bad from a geographic perspective but you’re still looking at ridiculous combined market share. Four pickups. Snohomish county? Maybe three stores can go to Krogersons, north of Marysville. There’s the three most populous counties in Washington and Krogersons might be able to grow Kroger by net ten stores.

There’s definitely lots of opportunity to swap a marginal QFC for a redeveloped Safeway or vice versa, but it’s not going to result in meaningful market share growth vs the existing footprint.

If my math is right, albs has 217 stores in WA between the three banners. If you use a rubric of Krogersons not getting more than the greater of either one store per census tract (about 4,000 people) and the surrounding/adjacent census tracts or 50% dollar or visit share inside that same geography, I don’t think it’s anywhere close to 100 stores picked up. 25 seems generous to me. The PNW ops of SpinCo are going to be a nice formidable, at-scale competitor to Kroger just as they are today under Cerberus/Albertsons.
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Re: the Big Grocers in WA

Post by storewanderer »

I think around Seattle the Fred Meyer+QFC operation has so much dominance that it is quite interesting but you are right that Kroger is unlikely to be able to pick up more than a dozen or so locations. Is it worth the hassle of divesting multiple QFCs to keep a better nearby Safeway? It may be best to just focus on divesting Safeway units and make it a clean break.

Assuming they go the route of divesting Safeway/Albertsons/Haggen units, I am guessing Kroger will pick up about 45 stores in WA and have to divest the rest. That is pretty dismal.

But there are places... where Kroger just isn't, that adding the Safeway locations gets Kroger into new areas and many of these are large/complete stores with pharmacy, etc... For instance:
Aberdeen
Anacortes
Centralia
Chehalis
Cheney
Davenport (I question Kroger's interest in small Marina stores like this one... very small, low growth area, short hours, obviously low volume)
Ferndale (Haggen)
Grand Coulle
Grandview
Leavenworth
Lynden
Omak
Sunnyside
Toppenish
Woodland
Walla Walla
multiple Spokane locations that are 3+ miles from a Fred Meyer

I am sure I am missing some.

What gets interesting is in some of these "outer" type of markets where you'd think this merger would be a benefit, there is going to need to be a divest. For instance Belfair- Safeway and QFC ( both with fuel). QFC is obviously lower volume. Then all the way up in Stanwood you have a Haggen and a QFC (Haggen is much busier); what do you do...?

Now when you look at all these divests that will have to occur in WA and OR, it begs another point- does the Safeway banner even end up with Kroger, given how many divests appear to be necessary from that banner? I know there is the issue of NorCal... which is starting to look like the only market at this point where Kroger needs the Safeway banner based on the divests we are projecting will occur here...
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Re: the Big Grocers in WA

Post by VibeGuy »

FM has been trying to make a new build work in Centralia / Chehalis for so long and had deals go south so many times, that I imagine someone in Portland rubbing their hands with glee, actually cackling about being able to break in to that market. The irony of their lack of presence is magnified by the very significant GM DC presence they have had there for decades.

Aberdeen is a nice pickup for them, for sure, geographically. That may be Walmart’s strongest grocery market in all of Western WA, by virtue of both the economic situation and the loss of Top, and it’s a long way to any Kroger banner.
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Re: the Big Grocers in WA

Post by VibeGuy »

As for what happens to the Safeway banner: I think it’s a three to five year transferable license to SpinCo and the boundaries are either AK + west of the Cascades or all of OR/WA. My suspicion is it gets a word appended like Northwest when it’s used in advertising, but not necessarily on the store signage.

Safeway once dealt with this internally because Milton-Freewater got broadcast media and the Oregonian out of Portland but the Safeway was actually part of the Boise operation. So Milton-Freewarer got carved out like the Fred Meyer at 5th and Alder. (kids, ask your parents)

Spokane is the only significant fly in this ointment. I don’t have share data but I suspect Kroger gets quite a few pickups in Spokane and Spokane Valley. There are still Albertsons-branded stores in that market as well. I don’t seem them running what would be an isolated island of Safeway by Krogersons locations despite being legally able to, given the lack of contiguity to any other Safeway By Krogersons markets.

The more interesting question to me is how Kroger brands the pickups. It’s clearly not Haggen, and I don’t think they get Safeway given how many stores aren’t moving.

If you believe that thesis statement, then I think the options are

1) They’re all QFC
2) The biggest flagships are QFC and the smaller ones are Albertsons
3) It’s all Fred Meyer, including, perhaps, the non-flagship QFC locations. Recall that Gig Harbor is a GM-free Fred Meyer with no weasel words like “Marketplace” or “Northwest Fresh”. They’ve really moved away from the One-Stop Shopping and “What’s On Your List Today” to emphasize grocery.

4) This is admittedly a long shot but it might be worth ripping the Band-Aid: all of the pickups become Kroger and QFC gets Krogerized as they come up for remodels / “later”. FM for stores with GM, Kroger for straight grocery + pharmacy.

I can’t think of any Kroger regions where chain-level acquired assets have gotten a rebrand to Kroger, though.
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Re: the Big Grocers in WA

Post by storewanderer »

I think this is going to be the watershed moment when it comes to the local banners. If they want to convert everything to Kroger, this is the time. If they don't do it now, then I don't think they ever will. In OR/WA they should stick with Fred Meyer on large stores and QFC on smaller stores. Albertsons banner is beyond damaged in WA and somewhat damaged in OR and probably needs to be retired from those two states I am sorry to say. I initially thought Albertsons is a good banner for SpinCo but after you've pointed out the significant number of Safeway divests I think it is clear SpinCo actually is going to end up getting the use of the Safeway banner.
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Re: the Big Grocers in WA

Post by storewanderer »

VibeGuy wrote: November 2nd, 2022, 5:13 pm FM has been trying to make a new build work in Centralia / Chehalis for so long and had deals go south so many times, that I imagine someone in Portland rubbing their hands with glee, actually cackling about being able to break in to that market. The irony of their lack of presence is magnified by the very significant GM DC presence they have had there for decades.

Aberdeen is a nice pickup for them, for sure, geographically. That may be Walmart’s strongest grocery market in all of Western WA, by virtue of both the economic situation and the loss of Top, and it’s a long way to any Kroger banner.
There is an independent in Aberdeen called Swanson or something. My understanding is the original family sold a few years ago. The stores are unremarkable but large. Worse now than they were under the owning family which wasn't good. I suppose Pattison may be interested in picking those up. They could probably do a better job on those to be honest.
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