Kroger to merge with Albertsons?

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Re: Kroger to merge with Albertsons?

Post by HCal »

storewanderer wrote: March 20th, 2023, 4:22 pm We will see what happens. Save Mart needs a deal first. Then they need to digest that deal. Save Mart's digestion of NorCal Albertsons nearly tanked the company but the people involved are all different now so we will see how this goes.

Best deal they could get is the right to use some banner (be it Albertsons, Vons, whatever) and keep as many stores with current branding as possible. Worst scenario is having to rebrand whatever they buy to Save Mart, that will probably not go well.
Rebranding to Save Mart will probably not go well, as the name is mostly unheard of outside the central valley, and sounds like a budget name. To someone who isn't familiar with the company, Food Maxx should be the conventional stores and Save Mart should be the discount stores.

If they need a banner for expansion, I would recommend Lucky, assuming they can get the rights. I don't think Albertsons would object, and Grocery Outlet has abandoned their claims.

But I find all this talk about national expansion of Save Mart to be rather amusing. The FTC learned a lesson from Haggen and isn't going to allow that again.
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Re: Kroger to merge with Albertsons?

Post by pseudo3d »

HCal wrote: March 20th, 2023, 10:28 pm
storewanderer wrote: March 20th, 2023, 4:22 pm We will see what happens. Save Mart needs a deal first. Then they need to digest that deal. Save Mart's digestion of NorCal Albertsons nearly tanked the company but the people involved are all different now so we will see how this goes.

Best deal they could get is the right to use some banner (be it Albertsons, Vons, whatever) and keep as many stores with current branding as possible. Worst scenario is having to rebrand whatever they buy to Save Mart, that will probably not go well.
Rebranding to Save Mart will probably not go well, as the name is mostly unheard of outside the central valley, and sounds like a budget name. To someone who isn't familiar with the company, Food Maxx should be the conventional stores and Save Mart should be the discount stores.

If they need a banner for expansion, I would recommend Lucky, assuming they can get the rights. I don't think Albertsons would object, and Grocery Outlet has abandoned their claims.

But I find all this talk about national expansion of Save Mart to be rather amusing. The FTC learned a lesson from Haggen and isn't going to allow that again.
Albertsons did rebrand a few Super Saver stores as Lucky in Utah (all this at about the time the last of the SuperValu SoCal Lucky stores closed)...and Grocery Outlet didn't "abandon" their claims, they assumed the Lucky trademark was abandoned and had to give it up in a lawsuit that was from 15 years ago.
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Re: Kroger to merge with Albertsons?

Post by ClownLoach »

HCal wrote: March 20th, 2023, 10:28 pm
storewanderer wrote: March 20th, 2023, 4:22 pm We will see what happens. Save Mart needs a deal first. Then they need to digest that deal. Save Mart's digestion of NorCal Albertsons nearly tanked the company but the people involved are all different now so we will see how this goes.

Best deal they could get is the right to use some banner (be it Albertsons, Vons, whatever) and keep as many stores with current branding as possible. Worst scenario is having to rebrand whatever they buy to Save Mart, that will probably not go well.
Rebranding to Save Mart will probably not go well, as the name is mostly unheard of outside the central valley, and sounds like a budget name. To someone who isn't familiar with the company, Food Maxx should be the conventional stores and Save Mart should be the discount stores.

If they need a banner for expansion, I would recommend Lucky, assuming they can get the rights. I don't think Albertsons would object, and Grocery Outlet has abandoned their claims.

But I find all this talk about national expansion of Save Mart to be rather amusing. The FTC learned a lesson from Haggen and isn't going to allow that again.
I don't see Save Mart bringing their name to any new territory. They are still using the Lucky name and I think if they asked for it Albertsons would give it up as part of their purchase deal. I see no similarity between the tiny, inexperienced Haggen team and the larger private equity backed Save Mart team with the former Albertsons CEO on staff. They are not going to fail at anything. But they aren't going to be a national chain either, maybe a super regional though depending on how much they pick up in this merger.

I think the lopsided use of the multiple brands is really going to rear its ugly head here. I mentioned on multiple occasions about the odd 60 mile circle full of Albertsons enclosing south OC, Temecula valley, north SD probably enough that you're all sick of hearing it, but the area around that circle is all almost all Vons - and there are far more Ralphs-Vons overlaps than Ralphs-Albertsons based on some Google maps browsing. So they really can't give up a banner for stores sold Pre-merger. It would be a disaster to have select Albertsons or Vons that keep the name under license but operate independently of the chain and would negatively impact all stores with those names. Giving up Albertsons name only makes sense if all transfers occurred at the close of an approved Kroger-Albertsons deal. So now what? We know they would have to keep many of those existing Albertsons stores in the bubble mentioned above. What do they do with those now if they would be selling some to Save Mart or whoever with the Albertsons nameplate? Rebrand the go forward as Vons now and then again to Ralphs later? And then what do they do with the many overlapping Vons that must get sold off for any chance of the big merger being approved? Does the buyer rebrand those to Albertsons once sold? It's a huge debacle and logistical nightmare, way worse than I realized. The advanced sale process really eliminates the possibility of releasing the Albertsons or Vons banners to an acquirer entirely.

I think it makes the case for Save Mart to bring the Lucky name back to SoCal and use it on every store they acquire. Acquiring the Albertsons banner is going to be too logistically challenging and messy. They can't afford to have basically every Albertsons and Vons store disrupted by mass customer confusion from name changes. When it became apparent that they would maintain all 3 banners in SoCal I wondered it it would come back to bite them and now it has.
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Re: Kroger to merge with Albertsons?

Post by storewanderer »

HCal wrote: March 20th, 2023, 10:28 pm

Rebranding to Save Mart will probably not go well, as the name is mostly unheard of outside the central valley, and sounds like a budget name. To someone who isn't familiar with the company, Food Maxx should be the conventional stores and Save Mart should be the discount stores.

If they need a banner for expansion, I would recommend Lucky, assuming they can get the rights. I don't think Albertsons would object, and Grocery Outlet has abandoned their claims.

But I find all this talk about national expansion of Save Mart to be rather amusing. The FTC learned a lesson from Haggen and isn't going to allow that again.
Haggen tried to go from 20 stores (and declining) to closer to 200 stores almost overnight. They got no distribution centers. No buying. Their distribution and buying operation was very small to begin with and they drew products from multiple wholesalers.

This Save Mart operation does not exactly have a tract record of success but in the past 3-5 years the company has been on an upswing with the remodel program, pricing program, and tightening things up at Food Maxx. The new ownership showed up and has done things I find odd like closing pharmacy but brought in a bunch of very qualified people who collectively have knowledge and experience across various geographies with Albertsons. Note one of the people they brought in is a logistics person. This signals to me they will be handling supplying of stores they buy, not using wholesalers like Haggen did in new territories.

Save Mart has the right to use the Lucky banner forever in its markets. But there is some kind of geography. And who made the agreement with Save Mart in the first place to even get to use the Lucky banner? That was Bob Miller when the LLC he was running sold the NorCal Albertsons division to Save Mart. Supervalu was still running a few Lucky units in SoCal at that time. The Utah rebranding of Super Saver to Lucky did not happen until after Safeway and I am not sure why that rebranding occurred. So at this point California and Nevada are wide open and the Lucky banner could be used with no confusion. I also do not see a path forward for the Utah Lucky Stores- 2 of them can probably stay and be converted to Smiths (Tooele is a former Smiths, easy conversion); 2 either need to be divested or just close.

Really if I were Save Mart I'd convert just about every Save Mart to Lucky. Maybe leave Save Mart in Modesto or Fresno but that would be about it. Despite everything I don't think Save Mart has a strong brand for itself. They are not a "cheap" store either, their name is misleading. Food Maxx runs quite a bit less labor than a F4L (yes it is possible) so it will be interesting to see how that goes.

The biggest thing here is just how many stores end up divested. If it is really only 250-300 stores, I don't know. That will be scattered random stores with various banners/sizes and a purchaser won't be able to make much of a splash buying those. If it ends up at the 650 stores then there are going to be some big things happening like entire divisions changing ownership.

I am seeing a lot of fine tuning at Food Maxx lately. Clearer promotional signage, updates to shelf tags this week, sharper marketing. I am very suspicious all of F4L may go to them. If that were to happen a banner change would not be necessary.
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Re: Kroger to merge with Albertsons?

Post by storewanderer »

ClownLoach wrote: March 21st, 2023, 12:20 am

I think it makes the case for Save Mart to bring the Lucky name back to SoCal and use it on every store they acquire. Acquiring the Albertsons banner is going to be too logistically challenging and messy. They can't afford to have basically every Albertsons and Vons store disrupted by mass customer confusion from name changes. When it became apparent that they would maintain all 3 banners in SoCal I wondered it it would come back to bite them and now it has.
What if it ends up being the buyer of divested stores ends up keeping the mess of banners and Kroger goes forward with the single banner Ralphs or Kroger... and rebrands its stores...

There would not be confusion because the stores under banners Albertsons/Vons/Pavilions would run as they run today and the customer would not notice changes, until the ones that went to Kroger got their name and format changed to Ralphs/Kroger.

Sort of like when Rite Aid sold all those stores to Walgreens. You really couldn't tell who owned what store unless you were paying a lot of attention (they did put a big Walgreens pharmacy sign up.. but people don't pay much attention... front end stayed entirely on Rite Aid's programs and ads and products) until the name change occurred to Walgreens.

Also Save Mart ran NorCal Albertsons as Albertsons for months as they converted stores. Those were actually some of the best run Albertsons Stores during those months, they added labor, made some price cuts on things like dairy, slowly worked in their private label, and really did a good job executing Albertsons perimeter programs. When they converted the stores to Save Mart and moved to Save Mart's terrible perimeter and ad programs things nosedived very rapidly.
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Re: Kroger to merge with Albertsons?

Post by HCal »

ClownLoach wrote: March 21st, 2023, 12:20 am I don't see Save Mart bringing their name to any new territory. They are still using the Lucky name and I think if they asked for it Albertsons would give it up as part of their purchase deal. I see no similarity between the tiny, inexperienced Haggen team and the larger private equity backed Save Mart team with the former Albertsons CEO on staff. They are not going to fail at anything. But they aren't going to be a national chain either, maybe a super regional though depending on how much they pick up in this merger.
I don't think the FTC really cares who is on the board of a company or how much experience they have. That hasn't been an issue in any merger I can think of. Save Mart may be significantly bigger now than Haggen was before its fiasco, but it is still a small, regional chain that has been truly successful only in a few core markets. "We have better management, we know what we are doing this time!" is not really convincing and the FTC will hopefully not fall for that nonsense.

If they really want to go this route, then make Kroger agree to backstop Save Mart's finances for 10 years after the merger. That will tell you whether they truly believe this is going to work.
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Re: Kroger to merge with Albertsons?

Post by veteran+ »

rwsandiego wrote: March 20th, 2023, 7:00 pm
veteran+ wrote: March 20th, 2023, 8:50 am
rwsandiego wrote: March 19th, 2023, 11:54 am

A Chicago friend moved to Florida a few years ago and shops almost exclusively at Publix. Her reasons for doing so are convenience, lack of alternatives (a neglected Winn-Dixie across the street from Publix and a Walmart neighborhood Market whose parking lot is hard to get in and out of), and their employees are friendly. My cousin, also an ex-Chicagoan, says the same. Both have mentioned several times "Publix is fine, but it isn't as good as Jewel." You hear that a lot from ex-Chicagoans.
May I ask, what part of Florida?

The more south you go the worse Publix gets.
Dunedin and The Villages.
That area makes sense in that the attitude and customer service is good (there are pockets in SoFl that still retain the Customer Service paradigm that made Publix famous). Other SoFl areas fare very badly in this.
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Re: Kroger to merge with Albertsons?

Post by veteran+ »

I concur with Clown!

If any of this goes through (I hope it does not because historically, all promises are lies), I believe the Lucky name is the best bet. These purported "geniuses" at Save Mart should ditch that awful name and fly with Lucky. If these chiefs are so good they can serously create strong competition (at least in California).
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Re: Kroger to merge with Albertsons?

Post by ClownLoach »

storewanderer wrote: March 21st, 2023, 12:40 am
HCal wrote: March 20th, 2023, 10:28 pm

Rebranding to Save Mart will probably not go well, as the name is mostly unheard of outside the central valley, and sounds like a budget name. To someone who isn't familiar with the company, Food Maxx should be the conventional stores and Save Mart should be the discount stores.

If they need a banner for expansion, I would recommend Lucky, assuming they can get the rights. I don't think Albertsons would object, and Grocery Outlet has abandoned their claims.

But I find all this talk about national expansion of Save Mart to be rather amusing. The FTC learned a lesson from Haggen and isn't going to allow that again.
Haggen tried to go from 20 stores (and declining) to closer to 200 stores almost overnight. They got no distribution centers. No buying. Their distribution and buying operation was very small to begin with and they drew products from multiple wholesalers.

This Save Mart operation does not exactly have a tract record of success but in the past 3-5 years the company has been on an upswing with the remodel program, pricing program, and tightening things up at Food Maxx. The new ownership showed up and has done things I find odd like closing pharmacy but brought in a bunch of very qualified people who collectively have knowledge and experience across various geographies with Albertsons. Note one of the people they brought in is a logistics person. This signals to me they will be handling supplying of stores they buy, not using wholesalers like Haggen did in new territories.

Save Mart has the right to use the Lucky banner forever in its markets. But there is some kind of geography. And who made the agreement with Save Mart in the first place to even get to use the Lucky banner? That was Bob Miller when the LLC he was running sold the NorCal Albertsons division to Save Mart. Supervalu was still running a few Lucky units in SoCal at that time. The Utah rebranding of Super Saver to Lucky did not happen until after Safeway and I am not sure why that rebranding occurred. So at this point California and Nevada are wide open and the Lucky banner could be used with no confusion. I also do not see a path forward for the Utah Lucky Stores- 2 of them can probably stay and be converted to Smiths (Tooele is a former Smiths, easy conversion); 2 either need to be divested or just close.

Really if I were Save Mart I'd convert just about every Save Mart to Lucky. Maybe leave Save Mart in Modesto or Fresno but that would be about it. Despite everything I don't think Save Mart has a strong brand for itself. They are not a "cheap" store either, their name is misleading. Food Maxx runs quite a bit less labor than a F4L (yes it is possible) so it will be interesting to see how that goes.

The biggest thing here is just how many stores end up divested. If it is really only 250-300 stores, I don't know. That will be scattered random stores with various banners/sizes and a purchaser won't be able to make much of a splash buying those. If it ends up at the 650 stores then there are going to be some big things happening like entire divisions changing ownership.

I am seeing a lot of fine tuning at Food Maxx lately. Clearer promotional signage, updates to shelf tags this week, sharper marketing. I am very suspicious all of F4L may go to them. If that were to happen a banner change would not be necessary.
Interesting observations on Food Maxx; for some reason or another I am sure that they will offload the entire Food4Less/FoodsCo operation as they can spin the message that they are ensuring there is viable low cost competition. Makes perfect sense for that to go to Save Mart intact. I don't personally think the Kroger/Albertsons shopper spends much time at either of those chains, but if they were better operated that could change. I also do not think they are competitive, at least not the last couple of times I visited a Food4Less the pricing on center store was largely the same as the nearby Ralphs coupled with a lower quality perimeter of questionable freshness. It almost felt like whatever doesn't meet the Ralphs brand quality gets sent to F4L.

I personally just don't like the F4L operation with the way they went into some of their locations in lower income communities with a captive audience. They generally didn't discount much more than a Ralphs but run a lower labor program with lower quality and of course customer bagging. The bad experience I had growing up where my grandmother was on an influential neighborhood council in Long Beach that worked to get Ralphs to commit to running a full service store and rebuild a terrible former Alpha-Beta. They couldn't expand due to parking limitations and basically struck a deal with community groups to support their request for a parking waiver. They got the support, tore down and rebuilt the store as promised then downgraded it to a F4L just a few years later and let many employees go due to the reduced labor the store runs on. Although it is one of only a few F4L stores that kept some of the Ralphs type perimeter features (they kept the same size deli/bakery and service meat) so they could probably claim its a "semi full service" store. But the entire experience left a bad taste in the mouths of the local community because of the bait and switch; if they felt the economics didn't support the Ralphs format they should have been up front with the community as other choices like Northgate could have been a better match in a community with no other room for a market.

I do think that Winco does get cross shop from everyone because they have higher standards than all of the other price impact formats I've seen; I've never seen a Winco that wasn't clean, fully stocked, free from bad odors etc. so the mainstream shopper feels like they are "shopping smart" at the discounter. Winco is the "Costco" of these off price formats and I believe they take quite a bit of Center store business away from the Kroger/Albertsons stores for many miles around their locations. Since moving closer to one we shop them about once a month and stock up on basics. I don't think F4L in its current form is competitive with Winco at all and I don't think Kroger is really innovating the format these days either. If the F4L stores changed hands and had an operator who was more enthusiastic about running a price impact format they might be able to make the appropriate changes to be a competitor to Winco, which in turn will just make them more competitive and ultimately the customer will win.
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Re: Kroger to merge with Albertsons?

Post by arizonaguy »

veteran+ wrote: March 21st, 2023, 8:17 am I concur with Clown!

If any of this goes through (I hope it does not because historically, all promises are lies), I believe the Lucky name is the best bet. These purported "geniuses" at Save Mart should ditch that awful name and fly with Lucky. If these chiefs are so good they can serously create strong competition (at least in California).
I'm curious what they would do in Arizona. There are only about 12 - 24 or so (out of 130) Albertsons / Safeway units that do not overlap significantly with a Fry's store and are not in rural areas that Fry's historically hasn't wanted to serve (safe for a few units built as Smith's). Currently the banners are separate as Albertsons is non-union and Safeway is union. In cases where an Albertsons and a Safeway were across the street from one another it seems that more often than not the Safeway was closed 50% of the time and the Albertsons was closed the other 50% of the time (when closures occurred). It is important to note that post-merger all new build stores have opened as Safeways. It's conceivable that the Albertsons bannered (non union) stores got divested to Raley's / Bashas' (the largest non union supermarket operator in Arizona) and the Safeway bannered (union) store got divested to Save Mart. I'm curious if Save Mart would license the Safeway name or if they would convert these stores to the Lucky or Save Mart banner.
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