Kroger to merge with Albertsons?

[mjhale]

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?

I think you are correct. If I look at my own market, after Ahold purchased Giant-MD they turned it into a clone of Stop and Shop for whatever benefit they thought that would bring them. Ahold removed the local bakery, removed a lot of the local product that was sold, moved management of the chain to Stop and Shop in New England. These efforts ultimately were not successful and management of the chain has been slowly brought back to the DC area. The question is if anyone really cares. Initially yes because you still had that group of long time Washingtonians who were loyal Giant-MD shoppers. But it has been 25 years since Ahold purchased Giant-MD. That is 25 years of migration in an increasingly transient area. Giant is a name on the front of store for one grocery chain that operates here. But I don't think many people remember anymore or care that Giant was locally owned and the king of DC area grocery. They either weren't living here at the time or were wronged by Giant somehow and went to the competition. Or they just naturally went to the competition as a part of how life happens.

Expanding this out to a national scale, if a store is all but blank grocery store except in the name on the front of the building, with this merger in play why not just take the dive and switch the names over to the primary owner while you are at it. The exceptions I could think of is if there is proven data that the local name still means something in a community or if the format is significantly different from the primary owner. For the latter I'm thinking of something like a hypermarket like Fred Meyer or the various hard discount banners. If one thinks about all the banners that Safeway bought prior to the Albertsons buyout, they are all Safeway but in name only - product, decor, operations. Just call it Safeway. It might be beneficial to finally break free from the old local names with this merger and say yes the primary owner - Kroger - really is taking over these stores. Let the customer decide what succeeds. The only place this doesn't work is where you eliminate one of the two competitors or only one ever existed in the first place.

[Super S]

I am going to throw something out there.

I feel that, if this merger does happen, that the combined company should, as a condition of the merger, eliminate the loyalty card programs and instead allow everybody to purchase items at sale prices, and lower the shelf prices. I have noticed regular prices creeping upward at Fred Meyer ever since they started requiring the card for sale prices, sometimes there are huge fluctuations taking place. Fred Meyer was more competitive before the card requirement.

Some people will argue that this will create doom for the company, using JCPenney during the Ron Johnson era as an example, even though JCPenney is not a grocery store. However, WinCo, Walmart, and others have proven that people are more accepting of this type of pricing structure in grocery stores. It would also more accurately line up with the promise to lower prices if the gimmicks were eliminated.

A company as big as this company will be, if the merger does happen, should be able to offer lower prices without a bunch of gimmicks attached.

It's probably wishful thinking though.

[mjhale]

Stores were able to survive before loyal cards and they will survive after. What they won't have without loyalty cards is customer data. I'd consider the sale price the "freebie" we get in the same way you get social media for free by giving away your data via posts to the social media company. The data we give away to the grocery store is what we are buying, when we buy it, what price. How critical that data is to operation is up for debate as there are grocery retailers who make tons but don't have loyalty cards. I'd love to see loyalty cards go away but the US as a whole seems unwilling to look at privacy beyond a very superficial level.

[Romr123]

I really wonder the value of having lovely in-store environments when you're forcing people to squint at their phones (price checking/app loading/coupon scanning/location finding). Just had a conversation w/a 37 year salesperson at Macy's on this topic--I am personally not an "app" guy, but HOW is "squinting down" getting the inspiration of "looking up" and seeing something you didn't intend to buy but now gotta have? Do away with the app-based/card-based shi** and use the payment/card data as the lodestar...

[BillyGr]

Expanding this out to a national scale, if a store is all but blank grocery store except in the name on the front of the building, with this merger in play why not just take the dive and switch the names over to the primary owner while you are at it. The exceptions I could think of is if there is proven data that the local name still means something in a community or if the format is significantly different from the primary owner. For the latter I'm thinking of something like a hypermarket like Fred Meyer or the various hard discount banners. If one thinks about all the banners that Safeway bought prior to the Albertsons buyout, they are all Safeway but in name only - product, decor, operations. Just call it Safeway. It might be beneficial to finally break free from the old local names with this merger and say yes the primary owner - Kroger - really is taking over these stores. Let the customer decide what succeeds. The only place this doesn't work is where you eliminate one of the two competitors or only one ever existed in the first place.

Seems like a logical idea - by leaving the few different names, you let people know that those stores are different (either more with the superstores or less with the discounts).

I feel that, if this merger does happen, that the combined company should, as a condition of the merger, eliminate the loyalty card programs and instead allow everybody to purchase items at sale prices, and lower the shelf prices. I have noticed regular prices creeping upward at Fred Meyer ever since they started requiring the card for sale prices, sometimes there are huge fluctuations taking place. Fred Meyer was more competitive before the card requirement.

A company as big as this company will be, if the merger does happen, should be able to offer lower prices without a bunch of gimmicks attached.

Thy are useful for other things - one is to notify people if there is a problem (like recalls), since they know who actually bought the items. Second is to give out coupons (which can be loaded on at home, do not need to be done while shopping) - and at least one store locally gives some items free via this, which they could not do otherwise without a way to limit them to one per customer.

[ClownLoach]

I am going to throw something out there.

I feel that, if this merger does happen, that the combined company should, as a condition of the merger, eliminate the loyalty card programs and instead allow everybody to purchase items at sale prices, and lower the shelf prices. I have noticed regular prices creeping upward at Fred Meyer ever since they started requiring the card for sale prices, sometimes there are huge fluctuations taking place. Fred Meyer was more competitive before the card requirement.

Some people will argue that this will create doom for the company, using JCPenney during the Ron Johnson era as an example, even though JCPenney is not a grocery store. However, WinCo, Walmart, and others have proven that people are more accepting of this type of pricing structure in grocery stores. It would also more accurately line up with the promise to lower prices if the gimmicks were eliminated.

A company as big as this company will be, if the merger does happen, should be able to offer lower prices without a bunch of gimmicks attached.

It's probably wishful thinking though.

I think the loyalty cards are an obsolete concept. The only data they can provide that credit cards don't is the purchase history for cash customers. My last company said they could uniquely identify 85% of their customers already.

[veteran+]

I am going to throw something out there.

I feel that, if this merger does happen, that the combined company should, as a condition of the merger, eliminate the loyalty card programs and instead allow everybody to purchase items at sale prices, and lower the shelf prices. I have noticed regular prices creeping upward at Fred Meyer ever since they started requiring the card for sale prices, sometimes there are huge fluctuations taking place. Fred Meyer was more competitive before the card requirement.

Some people will argue that this will create doom for the company, using JCPenney during the Ron Johnson era as an example, even though JCPenney is not a grocery store. However, WinCo, Walmart, and others have proven that people are more accepting of this type of pricing structure in grocery stores. It would also more accurately line up with the promise to lower prices if the gimmicks were eliminated.

A company as big as this company will be, if the merger does happen, should be able to offer lower prices without a bunch of gimmicks attached.

It's probably wishful thinking though.

We can wish.............................

But they will never give up all that data........................

[veteran+]

Stores were able to survive before loyal cards and they will survive after. What they won't have without loyalty cards is customer data. I'd consider the sale price the "freebie" we get in the same way you get social media for free by giving away your data via posts to the social media company. The data we give away to the grocery store is what we are buying, when we buy it, what price. How critical that data is to operation is up for debate as there are grocery retailers who make tons but don't have loyalty cards. I'd love to see loyalty cards go away but the US as a whole seems unwilling to look at privacy beyond a very superficial level.

You read my mind..................I made my statement before reading yours

[veteran+]

I really wonder the value of having lovely in-store environments when you're forcing people to squint at their phones (price checking/app loading/coupon scanning/location finding). Just had a conversation w/a 37 year salesperson at Macy's on this topic--I am personally not an "app" guy, but HOW is "squinting down" getting the inspiration of "looking up" and seeing something you didn't intend to buy but now gotta have? Do away with the app-based/card-based shi** and use the payment/card data as the lodestar...

My exact sentiments!!!!

[veteran+]

That Ralphs by Kroger idea is not new.

If the store is operated correctly (for the neighborhood), the above strategy can be very effective.

Food Fair Inc. used a similar approach when they purchased 75 Fox Markets in California and Nevada. The transition name was Fox's Food Fair. Then it went to Food Fair and finally Pantry Pride (often times next to or combined with J.M. Fields department store).

I still believe store brand loyalty has been diluted via the machinations of these mergers. The times have changed and many folks are just not as loyal as they used to be because of "brand" betrayals and extenuating circumstances like inflation, etc.

As far as complaints go.............often times they are temporary. People saying things and doing the opposite. As mjhale explained. They end up going back to the store as if nothing happened (providing the store is well managed).

So at the end of the day, how much Cachet does Ralphs (or any other)really have? How many miles (dependent on traffic and congestion) is someone willing to travel for their loyalty to a brand (time and cost of travel)?

I mean look at these yucky dollar stores. Most of these folks were loyal to traditional supermarkets at one time.

Merger or not, my point is loyalty to "brand" is just not what it used to be in retail. And it is retail's own fault.