Kroger to merge with Albertsons?

[jamcool]

Actually the typical Bashas’ store is the same size as a Safeway, while the Albertsons stores are the same size as a Non-Marketplace Fry’s.

[arizonaguy]

The only Albertsons I believe that Bashas' purchased was:

99 S Higley Rd, Gilbert, AZ 85296

https://goo.gl/maps/sTgLrzwCWCghoC4w6

It is probably the nicest Bashas' store in the chain as it was a really late build (mid 2000s) Albertsons.

It was a twin of this store:

3130 W Carefree Hwy, Phoenix, AZ 85086

Looks like it still had Jewel decor through 2018.

I wonder how this store performs compared to typical Bashas.

This store's performance could be a view into how Bashas could perform with additional divested Albertsons Stores. I would expect different results with divested Safeway Stores.

I'd expect a divested Safeway store to perform similar to a typical Bashas' store, which is, not great.

I'm beginning to come around to your theory that Save Mart would probably be a better buyer of the SW division than Raley's / Bashas'. I think Save Mart could do a decent job with the divested Albertsons and Safeway stores. The only hiccup I see is that Safeway does a decent pharmacy business.

[storewanderer]

Actually the typical Bashas’ store is the same size as a Safeway, while the Albertsons stores are the same size as a Non-Marketplace Fry’s.

It isn't about the size, it is about the way the customers perceive the two formats. Most customers still do not perceive Albertsons and Safeway as the same store even in the same market where they basically sell the same stuff at the same prices. Presentation and layout still differ quite a bit between the two formats... enough to make a lot of customers not know they are the same store.

[storewanderer]

I'd expect a divested Safeway store to perform similar to a typical Bashas' store, which is, not great.

I'm beginning to come around to your theory that Save Mart would probably be a better buyer of the SW division than Raley's / Bashas'. I think Save Mart could do a decent job with the divested Albertsons and Safeway stores. The only hiccup I see is that Safeway does a decent pharmacy business.

The pharmacy thing is a big problem that should probably disqualify Save Mart as a buyer. The only way I can see it work is if they find someone else to operate the pharmacies in the stores- but that someone else should be a new pharmacy operator to the market to ensure competition. Selling pharmacies in Arizona to Walgreens isn't going to fly- you need a NEW pharmacy competitor.

If there was an issue with profitability on Save Mart's existing pharmacy business, for instance too low of reimbursements in CA, they could have closed the CA pharmacies and kept the NV ones (which did decent volume). But they didn't go that route- they closed the NV ones too. They could come out and say they want to run pharmacies in AZ, OR, whatever, but would they run them long term?

[HCal]

The pharmacy thing is a big problem that should probably disqualify Save Mart as a buyer. The only way I can see it work is if they find someone else to operate the pharmacies in the stores- but that someone else should be a new pharmacy operator to the market to ensure competition. Selling pharmacies in Arizona to Walgreens isn't going to fly- you need a NEW pharmacy competitor.

If there was an issue with profitability on Save Mart's existing pharmacy business, for instance too low of reimbursements in CA, they could have closed the CA pharmacies and kept the NV ones (which did decent volume). But they didn't go that route- they closed the NV ones too. They could come out and say they want to run pharmacies in AZ, OR, whatever, but would they run them long term?

I honestly doubt the FTC is going to bother itself with pharmacies here. They are a minor issue. But Save Mart could do what Stater did when they bought the Albertsons locations that had pharmacies and find some local independent pharmacy business to run them. If this doesn't last, it would be easy to sell them off to one of the big 3 after the dust has settled, and the number of pharmacies will probably be low enough that selling them won't attract much attention.

[jamcool]

It is a problem in AZ, the Safeway in many little towns is often the only pharmacy in town.

[BillyGr]

It is a problem in AZ, the Safeway in many little towns is often the only pharmacy in town.

And if that were to close, someone else would move in and take over. Probably not enough business for two brands at once, but there would be enough for one, no matter where it wound up being.

[storewanderer]

I honestly doubt the FTC is going to bother itself with pharmacies here. They are a minor issue. But Save Mart could do what Stater did when they bought the Albertsons locations that had pharmacies and find some local independent pharmacy business to run them. If this doesn't last, it would be easy to sell them off to one of the big 3 after the dust has settled, and the number of pharmacies will probably be low enough that selling them won't attract much attention.

Under what logic do you think it is okay to let the pharmacy thing pass?

Remember the failed Rite Aid-Albertsons merger? The failed Rite Aid-Walgreens merger? FTC concerns were a major issue with those (shareholders doomed the Albertsons one though but FTC was why it was taking so long to go anywhere) and it was all about the pharmacies; it wasn't about the $10k a week in sales front ends...

Especially now that the State of California Governor has announced the state is "done with Walgreens." This is particularly significant. Though I am not quite sure what it means. You can't pull health plans from Walgreens overnight (or can you.. maybe we are about to find out). You cannot afford to lose any more pharmacy competition in the state when the state has called to be "done with Walgreens."

[retailfanmitchell019]

Remember the failed Rite Aid-Albertsons merger? The failed Rite Aid-Walgreens merger? FTC concerns were a major issue with those (shareholders doomed the Albertsons one though but FTC was why it was taking so long to go anywhere) and it was all about the pharmacies; it wasn't about the $10k a week in sales front ends...

Especially now that the State of California Governor has announced the state is "done with Walgreens." This is particularly significant. Though I am not quite sure what it means. You can't pull health plans from Walgreens overnight (or can you.. maybe we are about to find out). You cannot afford to lose any more pharmacy competition in the state when the state has called to be "done with Walgreens."

I expect the same outcome to happen with this Kroger/Albertsons megamerger: the FTC will likely stall this merger for a long time before the merger is possibly aborted. This merger isn't just about the meat department or cereal aisle, Kroger and Albertsons operate pharmacies too. That Albertsons/Rite Aid deal was done during the Trump administration... I'm expecting the Biden FTC to be about as strict, if not stricter, than the Trump FTC.
I think what Newsom means is that the gov't of CA will probably divest funds from Walgreens, similar to Portland divesting funds from Walmart.
https://www.yesmagazine.org/economy/201 ... om-walmart

[babs]

Remember the failed Rite Aid-Albertsons merger? The failed Rite Aid-Walgreens merger? FTC concerns were a major issue with those (shareholders doomed the Albertsons one though but FTC was why it was taking so long to go anywhere) and it was all about the pharmacies; it wasn't about the $10k a week in sales front ends...

Especially now that the State of California Governor has announced the state is "done with Walgreens." This is particularly significant. Though I am not quite sure what it means. You can't pull health plans from Walgreens overnight (or can you.. maybe we are about to find out). You cannot afford to lose any more pharmacy competition in the state when the state has called to be "done with Walgreens."

I expect the same outcome to happen with this Kroger/Albertsons megamerger: the FTC will likely stall this merger for a long time before the merger is possibly aborted. This merger isn't just about the meat department or cereal aisle, Kroger and Albertsons operate pharmacies too. That Albertsons/Rite Aid deal was done during the Trump administration... I'm expecting the Biden FTC to be about as strict, if not stricter, than the Trump FTC.
I think what Newsom means is that the gov't of CA will probably divest funds from Walgreens, similar to Portland divesting funds from Walmart.
https://www.yesmagazine.org/economy/201 ... om-walmart

According to CNN, no one has a clue what being done with Walgreens means. The state is currently reviewing it's relationship with Walgreens.