Kroger to merge with Albertsons?

This is the place for general and miscellaneous posts on topics which might extend past the boundaries of any specific region. No non-grocery posts.
Locked
ClownLoach
Valued Contributor
Valued Contributor
Posts: 2694
Joined: April 4th, 2016, 10:55 pm
Has thanked: 40 times
Been thanked: 289 times
Status: Online

Re: Kroger to merge with Albertsons?

Post by ClownLoach »

jamcool wrote: March 26th, 2023, 2:05 pm It wouldn’t surprise me if they begin to use a Kroger-ized logo for the various store names.
That would cost a lot of money to rebrand, and many older stores may now be under sign ordinances limiting the size of new signage. Adding an icon is easy and generally the existing sign can be moved if it is new enough to have been installed with the modern "dot plot" process (where they basically have a giant paper banner with dots representing all the holes to be drilled).
ClownLoach
Valued Contributor
Valued Contributor
Posts: 2694
Joined: April 4th, 2016, 10:55 pm
Has thanked: 40 times
Been thanked: 289 times
Status: Online

Re: Kroger to merge with Albertsons?

Post by ClownLoach »

retailfanmitchell019 wrote: March 27th, 2023, 5:09 pm
storewanderer wrote: March 26th, 2023, 10:49 pm
At the end of the day I see rebranding. They really have no choice. They have too many banners and this Albertsons merger forces them to make a decision. Do they align around their existing brands (and kill the Albertsons/Safeway brands) or just wipe the slate clean and rebrand everything to Kroger?

One strategy I see that could be interesting is this:
They rebrand most of their existing stores to the Kroger brand (Smiths, Frys, Ralphs, etc.) but Fred Meyer and Harris Teeter keep their own brands. Then over time as they do major remodels/resets (and repricing), they rebrand the Safeway/Albertsons stores to the Kroger brand. In the mean time stores that are too small, captive audience locations, or too rural, keep the overpriced Safeway branding and it basically turns into a brand for inferior stores that have a smaller mix, way higher pricing, and are connected to Kroger but not with the Kroger brand. Kind of like how Kroger has been running QFC and Ralphs over the years.

Jewel is another one that I question if there is any reason to rebrand. Exactly how many "Kroger" stores actually compete with Jewel? I know there are a few on fringes of Jewel territory. I am not sure who has the best stores in that case. It may be appropriate to rebrand some of those "fringe territory" Jewel units to Kroger. I expect Mariano's ends up mostly divested/closed down and maybe F4L Chicago also ends up that way too.
This is how I see Kroger going banner wise if the merger is completed:
Banners that will be killed off:
QFC (replaced with Safeway)
Andronico's and Pak N Save (replaced with Safeway)
Tom Thumb and Market Street (replaced with Kroger),
Jay C and PayLess in Indiana (replaced with Kroger),
Lucky in UT (replaced with Smith's),
Safeway in AZ (replaced with Fry's),
Safeway in NV/NM/ID/MT (replaced with Smith's),
Safeway in CO/NE/WY/SD (replaced with King Soopers or City Market, and maybe kill off City Market entirely),
Safeway Eastern Seaboard (replaced with Harris Teeter),
Baker's in Omaha (replaced with Dillons),
Gerbes in central Missouri (replaced with Dillons),
Metro Market in Milwaukee (replaced with Pick n Save).
Star Market ("Stah Mahket" :lol: ) in Boston (replaced with Shaw's)
Balducci's and Kings (replaced both with Acme),
Vons (replaced with Ralphs).

Most, if not all Albertsons banner stores, will be divested to Save Mart. The Albertsons name will be property of Save Mart.
I expect Food 4 Less/Foods Co./Rvler/Mariano's to go to Save Mart also.
There is no doubt about it that Save Mart would put Mariano's, Rvler, and the Chicago F4L stores up for sale 2 seconds after the ink dries out, similar to what happened when Cerberus acquired Cub stores around Chicago and those two Jewel stores in Springfield, IL.
I still think Save Mart could be a temporary vehicle until Ahold acquires the Albertsons banner.

Fred Meyer will be here to stay.

When all is said and done, Kroger will have 14 banners left:
Dillons
Fred Meyer
Fry's
Harris Teeter
King Soopers
Kroger
Pick n Save
Ralphs
Smith's
Safeway
Jewel
Acme
Shaw's
United

And considering that HT isn't really integrated into Kroger, I wonder if Kroger will end up putting HT up for sale.
I love to keep calling this out, but there are more Vons overlaps with Ralphs than Albertsons overlaps in SoCal. To be blunt more Vons will have to divest than Albertsons. So if you remove all overlap Vons and basically all Albertsons in SoCal then you have a reverse merger where Ralphs falls to second or even third place. And the strategy being implemented where stores are going to be sold off independent of any government order means that we will see lots of Vons be sold early but few Albertsons. Every time I play with maps and look at this scenario I wind up with a 3 to 1 Vons to Albertsons divest scenario for actual overlaps that must be sold for such a merger. So in that scenario if you do intend for Albertsons to go to a third party you're literally going to have to rebrand "keeper" Albertsons, which are many, to Vons and then again to Ralphs at the end? It makes no sense. Make no mistake about it, more Vons named stores will divest than Albertsons in SoCal.

A different strategy is needed for those banners in SoCal because the advance sale/divest strategy timing ruins everything. Although I understand Save Mart ran stores "as" Albertsons in NorCal this is a different type of transaction and I highly doubt that the self-selection of divest stores will be tolerated if they remain tied to the parent companies for even a second. The entire strategy is to basically remove all the overlaps themselves thereby forcing a "where's the beef?" type discussion with the FTC later. They want to control the entire narrative here so that they own the stores they want when it's done, and if the merger fails then both sides have still culled unwanted or less viable stores off to competitors. This is why I suspect that Save Mart will buy many in the advance sale and use the Lucky name. If they get the Albertsons banner in the end it still would result in multiple brand chaos on divest stores. The "pre-sale" strategy changes everything.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: Kroger to merge with Albertsons?

Post by storewanderer »

bryceleinan wrote: March 27th, 2023, 7:30 pm Our local Smith’s in Dayton replaced their “open 24 hours” sign on the main pylon to a fruit cart logo. I also hear people mention the Kroger name a lot more often, so there’s that going for them. I also noticed the most recent remodel doesn’t mention Smith’s except for the welcome sign inside the store.
That is a blue pylon logo... I sure wonder why it is blue...

Also somewhat recently Smiths on the two Reno Stores (don't think I've seen this on the others) took on the front building and painted a big blue Pick Up sign off to the side of each sort of aligned with the parking lot row where the pick up spaces are. Super cheap. Despite all the weather these paint jobs still look bright and fresh. There is no lighting on these painted building areas at night.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: Kroger to merge with Albertsons?

Post by storewanderer »

ClownLoach wrote: March 27th, 2023, 7:47 pm
jamcool wrote: March 26th, 2023, 2:05 pm It wouldn’t surprise me if they begin to use a Kroger-ized logo for the various store names.
That would cost a lot of money to rebrand, and many older stores may now be under sign ordinances limiting the size of new signage. Adding an icon is easy and generally the existing sign can be moved if it is new enough to have been installed with the modern "dot plot" process (where they basically have a giant paper banner with dots representing all the holes to be drilled).
Frankly if you are going to go to all the trouble to add the meaningless fruit cart logo and in order to do you have to go get permits, go through approval processes, re-center signs, re-do wiring, re-cut holes in the wall, whatever, you may as well just rebrand the stores to Kroger while you're at it.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: Kroger to merge with Albertsons?

Post by storewanderer »

retailfanmitchell019 wrote: March 27th, 2023, 5:09 pm
This is how I see Kroger going banner wise if the merger is completed:
Banners that will be killed off:
QFC (replaced with Safeway)
Andronico's and Pak N Save (replaced with Safeway)
Tom Thumb and Market Street (replaced with Kroger),
Jay C and PayLess in Indiana (replaced with Kroger),
Lucky in UT (replaced with Smith's),
Safeway in AZ (replaced with Fry's),
Safeway in NV/NM/ID/MT (replaced with Smith's),
Safeway in CO/NE/WY/SD (replaced with King Soopers or City Market, and maybe kill off City Market entirely),
Safeway Eastern Seaboard (replaced with Harris Teeter),
Baker's in Omaha (replaced with Dillons),
Gerbes in central Missouri (replaced with Dillons),
Metro Market in Milwaukee (replaced with Pick n Save).
Star Market ("Stah Mahket" :lol: ) in Boston (replaced with Shaw's)
Balducci's and Kings (replaced both with Acme),
Vons (replaced with Ralphs).

Most, if not all Albertsons banner stores, will be divested to Save Mart. The Albertsons name will be property of Save Mart.
I expect Food 4 Less/Foods Co./Rvler/Mariano's to go to Save Mart also.
There is no doubt about it that Save Mart would put Mariano's, Rvler, and the Chicago F4L stores up for sale 2 seconds after the ink dries out, similar to what happened when Cerberus acquired Cub stores around Chicago and those two Jewel stores in Springfield, IL.
I still think Save Mart could be a temporary vehicle until Ahold acquires the Albertsons banner.

Fred Meyer will be here to stay.

When all is said and done, Kroger will have 14 banners left:
Dillons
Fred Meyer
Fry's
Harris Teeter
King Soopers
Kroger
Pick n Save
Ralphs
Smith's
Safeway
Jewel
Acme
Shaw's
United

And considering that HT isn't really integrated into Kroger, I wonder if Kroger will end up putting HT up for sale.
You know some of those Save Mart management who have a lot of Albertsons tenure also have spent some time at Ahold. And we also don't know who else may show up over at Save Mart either... there are some other really good people who have moved between Albertsons-Ahold-back to Albertsons etc.

I think there is something with HT that we do not know about that is keeping it separate, for now. I question how long that will go on. Their TopCo contract must be a real iron tight thing that cannot be broken. I don't see it being sold- it is too good of an asset. Also not sure who would buy it. It could theoretically be spun off and stand alone again even.

I am not really sure about Acme/Safeway East. I wonder if it would be better to just rebrand all of that to Kroger. Maybe not because those two represent a lot of underperforming/junk stores, so maybe they are better kept under the Acme/Safeway banners as opposed to putting the Kroger banner on a bunch of substandard underperforming stores.

The vision I have for the Kroger banner is that it needs to represent high volume 60,000 square foot combination food/drug/pharmacy stores with competitive pricing and large fresh department offers (even if the stuff is marginal). Some of the divisions like Smiths, Frys, King Soopers, Jewel, even a lot of Dillons- they are there- they have mostly stores that fit this profile and I think the few smaller stores could slip in since even their smaller stores usually have pharmacy so they appear to have a complete offer even if smaller. With Pick N Save and Albertsons you have a lot of big stores but you have volume issues... so I don't know... the real problem comes with Ralphs, Safeway, Vons, Acme, Shaws.. these chains have a wide mix of store sizes and a wide mix of store volume levels, and higher pricing. Many do not have pharmacy and no chance at adding fuel.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: Kroger to merge with Albertsons?

Post by storewanderer »

Super S wrote: March 27th, 2023, 7:14 pm I am not convinced that the Albertsons name will entirely disappear, especially in Idaho, but could also see this brand remaining in Montana and Wyoming.
The fate of Albertsons banner will hinge on what stores end up divested. If enough Albertsons Stores get divested, I could see the banner sold to a buyer and the buyer gains rights to that banner.

Montana/Wyoming is a relatively low number of stores. Smiths previously bombed in much of that territory so I consider it a risky idea to use the Smiths banner any further than the few remaining stores it has in those territories. Safeway is very weak in those territories and Albertsons is obviously the stronger name.

Idaho is problematic because in Boise there is significant overlap. Boise is one place where divesting Fred Meyer might make sense (Spokane too) but there is nobody you can logically divest it to who can continue to support that format... or is there? The only potential buyer would be Meijer and I don't see them making that kind of a leap. I do wonder if Meijer could work a deal with URM or Associated to support their grocery program and then Meijer try to procure general merchandise from wherever their distribution is (it is not unheardof to transport general merchandise long distances). But the next question is would Kroger want to do something that would push Meijer west (and undoubtedly spark further Meijer expansion in places like CO)... probably not. So Albertsons goes and Fred Meyer stays to keep the peace.

What I find most ironic when this is all said and done is there is going to be so much elimination of competition in so many markets that Northern California with the heavy presence of Safeway, Raleys, Save Mart, Whole Foods, Trader Joes, 99 Ranch, Seafood City, WinCo, a decent Wal Mart presence in many spots, Grocery Outlet, and a handfull of smaller chains/specialty chains is actually going to be one of the markets that still has an awful lot of competition in terms of "number of different competitors"...
mjhale
Shift Manager
Shift Manager
Posts: 429
Joined: October 2nd, 2016, 4:02 pm
Has thanked: 1 time
Been thanked: 47 times
Status: Offline

Re: Kroger to merge with Albertsons?

Post by mjhale »

storewanderer wrote: March 28th, 2023, 12:00 am I think there is something with HT that we do not know about that is keeping it separate, for now. I question how long that will go on. Their TopCo contract must be a real iron tight thing that cannot be broken. I don't see it being sold- it is too good of an asset. Also not sure who would buy it. It could theoretically be spun off and stand alone again even.
The recent discussion about the merger has me wondering why Harris Teeter seemingly remains separate from Kroger in terms of operation of its stores. Does Kroger consider it to be the "high end" division or is it some sort of business contract as you noted that is involved? It's non-union status? In my area the decision is going to be Safeway or Harris Teeter if the merger goes through. Harris Teeter overall has larger, nicer, newer stores. They have good coverage in some areas that Giant and Safeway are not heavy in. Safeway generally has older stores but they have mostly been remodeled recently to some degree. Safeway's inner suburb stores tend to be small whereas Harris Teeter has managed to build almost normal sized stores, many of which are in multi-use developments. I feel that Safeway is stronger in deli and bakery, and Harris Teeter stronger in service meat and fish. Produce and center store are about the same for both. Harris Teeter is non-union as I understand it. I wonder how that will factor into divestitures if the merger goes through. When Ahold and Delhaize were merging the initial plan was to keep Food Lion in Southern Maryland and Fredericksburg and sell off the Giant locations. The union and the community together got the company to reverse that decision. It is interesting that you bring up Safeway as the banner for the "legacy" stores. Safeway has been in DC since the 1920s via Sanitary and I believe is seen as a legacy grocer. Harris Teeter is the newcomer comparatively speaking. I believe their first store in Arlington opened in the late 90s. Certainly in the outer suburbs Harris Teeter is the newcomer and seems to have done well. They are neck and neck with Giant for market share in Loudoun County, VA. Harris Teeter was able to get into a lot of the new 2000s developments when Giant was floundering in the aftermath of the Ahold purchase and Ahold's financial problems.
jamcool
Store Manager
Store Manager
Posts: 1019
Joined: March 5th, 2009, 10:27 pm
Been thanked: 50 times
Status: Offline

Re: Kroger to merge with Albertsons?

Post by jamcool »

Even after the merger with Dillon in the 80s, many of the newly acquired former Dillon stores-Fry's, King Sooper, City Market-still were offering Topco private label products-Top Care, Food Club, Kingston..etc. I don't know if Topco is still a secondary supplier for Kroger (outside H-T)
veteran+
Valued Contributor
Valued Contributor
Posts: 2234
Joined: January 3rd, 2015, 7:53 am
Has thanked: 1204 times
Been thanked: 72 times
Status: Offline

Re: Kroger to merge with Albertsons?

Post by veteran+ »

Here's a little food for thought 🤔

IMHO, the entirety of monikers and their histories have been severely compromised. Merger after merger has deteriorated the value and reputation of these nameplates. Some have managed to retain some of their prestige more than others (King Soopers better than Ralphs with both at one time being A-list status in supermarket operations writ large).

These "names" used to really mean something to the shopper and even to the industry. Their individual reputations have been diluted year after year by these rapacious conquerors. These raider entities were comfortable in withholding capex and allowing units to be decrepit ambassadors of the "name". That is truly destructive advertising.

So it begs the question, do shoppers really care anymore about that destroyed "Name"? Does it really mean anything to shop at the once fabulous Ralphs? Or Pavilions? Or even King Soopers (holding on but no where close to its apex reputation)?

Just thinking out loud....................................your thoughts?
User avatar
retailfanmitchell019
Assistant Store Manager
Assistant Store Manager
Posts: 891
Joined: November 10th, 2019, 11:17 am
Location: 760 area code
Has thanked: 39 times
Been thanked: 57 times
Contact:
Status: Offline

Re: Kroger to merge with Albertsons?

Post by retailfanmitchell019 »

ClownLoach wrote: March 20th, 2023, 6:26 pm
I think the death of the Vons banner makes the most sense as well. They will have to make changes somewhere along the way because it's rather obvious that Albertsons should have just pulled the trigger on picking one banner in the first place after the merger. They have wound up with lopsided branding with big lumps of Albertsons in some areas, Vons in others. They can't divest a division by banner name in SoCal at all as some have suggested here. For example if they just said everything with an Albertsons sign goes then they abandon whole areas like Temecula valley, North San Diego etc. and South OC. But the opposite is true elsewhere. If they only separated all of Albertsons stores then they would still have gross overlap with Vons and Ralphs all over Los Angeles County, North Orange County and other areas. If it suddenly became all Albertsons and also a bunch of Vons and they all went to Save Mart or whoever else then when it is done the entirety of those areas would be less competitive than it is today and Ralphs/Kroger would actually move down to 2nd place in some areas. Why pay your way to move down from first to second? It would defy logic. Ultimately they kicked the can down the road on branding decisions (maybe a good idea with how they botched the Lucky deal and how bad the Haggen deal went down) but they should have united with one banner after a few years since they've basically been operating as one anyway. They could have educated their customers that there isn't any difference between a Vons or an Albertsons anymore and avoided fallout from rebranding. Now there is real risk that some stores could get rebranded twice if the transactions are spaced out.
Not trying to be argumentative, but the fact of the matter is, Kroger (Ralphs/F4L) is in a dead heat with ACI for #1 share in SoCal anyway. There are going to be more divests than you might think. My idea is for Ralphs to get every non-overlapping Vons/Pavilions and have every Albertsons brand store divested into Save Mart. Ralphs would solidify their position in LA/OC and become #1 in San Diego County. Vons actually outnumbers Albertsons in North SD (Penasquitos Creek is the southern border). F4L also goes to Save Mart, with some nicer F4L stores (like Santee) staying and converting to Ralphs.

Ralphs has a strong presence in South OC. You are right that the Temecula Valley is Albertsons country. Ralphs has already failed in a few spots in that area, do you try again?
Locked