Kroger to merge with Albertsons?

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Re: Kroger to merge with Albertsons?

Post by retailfanmitchell019 »

jamcool wrote: March 28th, 2023, 10:42 pm Fry's is Kroger all but in name..same "kroji" TV ads as Kroger, Kroger signage everywhere, Jobs at Kroger machine in the front. And many newcomers to Arizona come from the Midwest-Kroger's current/previous retail area.

Ralphs is a different situation...the chain goes back to the late 1800s in SoCal, and is often remarked about in LA-oriented TV shows and movies.
Yeah, that's what I mean when I say "Ralphs is a famous SoCal brand".

Honestly, in the San Diego region, if Ralphs were to rebrand to Kroger tomorrow, there would be mixed results.
There are many people that have grown up here long enough to have a liking to Ralphs. However, like AZ, there are many people moving here from all over the place, mostly immigrants, well-off transplants from the Midwest/PNW/Northeast, and military folks. It's a little different in LA, but most people aren't San Diego "born and raised".
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Re: Kroger to merge with Albertsons?

Post by veteran+ »

The problem with ""Ralphs is a famous SoCal brand" is that it does not live up to that fame anymore.

Trust me, almost no one is born and raised in Los Angeles :lol: :lol: ;) ;)
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Re: Kroger to merge with Albertsons?

Post by buckguy »

jamcool wrote: March 28th, 2023, 8:49 am 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)
Dillon had renewed its contracts to Topco not long before the merger with Kroger, so it took a while for Kroger brands to supplant them. Stilll, the merger was partly premised on being able to have more outlets for Kroger private label products, which happened in the long run. That merger happened shortly after Kroger had closed operations in a number of places and they probably had overcapacity for their manufacturing operations.

Kroger doesn't "need" to merge in order to have outlets for private label merchandise, although it certainly gives them leverage. At this point, Kroger supplies many items to competitors and this has gone on for many years. Even decades ago, their regional bakeries supplied competitirs, so this is nothing new. Winn-Dixie supplied competitors with center store items but they ran into overcapacity because their core retail business declined. I would guess that part of their bankruptcy was the overcapacity, given that food processing is a low margin business that has widespread overcapacity, overall.
Last edited by buckguy on April 3rd, 2023, 4:44 am, edited 1 time in total.
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Re: Kroger to merge with Albertsons?

Post by buckguy »

veteran+ wrote: March 28th, 2023, 11:01 am 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?
It's a worthwile question and more interesting than the endless speculation abouyt who gets what stores.

I think it's complicated---my understanding from family/friends was that Lucky was known for prices, but not much else, so taking that away from the stores as well as changing the name was a mistake because the stores lost their drawing card with the identity change. They had a loyal following, but lots of people rarely went there because they weren't great beyond being cheap and Albertson's didn't give those shoppers a reason to take another look.

The problem with the Kroger name is that lots of people know them and are not necessarily fans. I've lived in their territories multiple times and know people who still do. No one gets excited about Kroger and lots of people are happy when they get some serious competition. Publix may not entirely live up to its hype, but it's easy to like them more than Kroger. People old enough to remember Kroger in places like Chicago probably remember them as the last place many people went--lousy perishables, forgettable stores. You could argue that Kroger is no worse than Ralphs or Vons as they exist now, but grocery mergers often lead to stores getting worse as the merged operations look for ways to introduce economies to pay off debt and address the "efficiency" premise of these mergers---Ahold screwed-up Finast and Giant-Landover. Finast had been repositioned as a set of middling, mostly price sensitive chains (some of their predecessor chains were more quality-oriented) and Giant was better than Safeway mostly for the deli-bakery---Ahold failed to hold the middle with Finast and really disappointed Giant shoppers who were loyal even though no one in DC is from here.

So, it's pretty evident that Kroger brings little positive to the table and Kroger could make things worse and the rebranding will make it easy to blame them. People "blame" Macy's for wrecking stores after the May-Federated merger even though a lot of things didn't really change much in many places--esp. with the old May stores.

Or will people not care very much but perhaps take more advantage of the other more niche choices in the marketplace? I've been to a few Albertson's at different times in different places and they seem utterly forgettable, not great, so like Kroger and maybe a little worse. Maybe with them, outside of their core territory in Idaho--a new name might not make much difference.
Last edited by buckguy on April 3rd, 2023, 4:46 am, edited 2 times in total.
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Re: Kroger to merge with Albertsons?

Post by storewanderer »

buckguy wrote: March 30th, 2023, 5:29 am

It's a worthwile question and more interesting than the endless speculation abouyt who gets what stores.

I think it's complicated---my understanding from family/friends was that Lucky was known for prices, but not much else, so taking that away from the stores as well as changing the name was a mistake because thestores lost their drawing card with the identity change. They had a loyal following, but lots of people rarely went there because they weren't great beyond being cheap and Albertson's didn't give those shoppers a reason to take another look.
Or will people not care very much but perhaps take more advantage of the other more niche choices in the marketplace? I've been to a few Albertson's at different times in different places and they seem utterly forgettable, not great, so like Kroger and maybe a little worse. Maybe with them, outside of their core territory in Idaho--a new name might not make much difference.
Most of these chains are not much to get excited about for the average shopper.

Lucky was generally a well run store. Their quality was fine and their service was typical chain supermarket type service. Their mix was above average in my opinion. Albertsons screwed up the quality and pricing.
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Re: Kroger to merge with Albertsons?

Post by storewanderer »

Not sure how credible this is but there is also talk the number of divests is going up.

https://www.natlawreview.com/article/kr ... -headwinds
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Re: Kroger to merge with Albertsons?

Post by ClownLoach »

storewanderer wrote: April 1st, 2023, 7:26 pm Not sure how credible this is but there is also talk the number of divests is going up.

https://www.natlawreview.com/article/kr ... -headwinds
I highly doubt Kroger will revise their merger agreement. It has a cap on divestitures which I believe is 675. If anything over that is required they have the right to terminate the agreement, and I would guess they would not owe the break up fee either (otherwise why have the clause). The only real benefit I see here is increased economy of scale and if too many divestitures are required then there isn't a point in spending the money to proceed.
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Re: Kroger to merge with Albertsons?

Post by retailfanmitchell019 »

storewanderer wrote: April 1st, 2023, 12:14 am Lucky was generally a well run store. Their quality was fine and their service was typical chain supermarket type service. Their mix was above average in my opinion. Albertsons screwed up the quality and pricing.
And that's kind of the reason why Albertsons is getting into this Kroger merger. Although I still give most of the blame to Larry...
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Re: Kroger to merge with Albertsons?

Post by Bagels »

The Albertsons-Lucky merger/ integration happened about 25 years ago. It was literally a lifetime ago: Ralphs (including F4L and Huges), Vons (including Pavilions) and Lucky-Albertson controlled over 70% market share. Today, that number is less than 40%.

Consider that just 10 years earlier, when Vons acquired Safeway's SoCal stores, Von's management said within 10 years, every store would be bannered as Pavilions (modern, large format store), Tianguis (Latino format) and two concepts under development: a no-frills banner and a premium banner that mimicked Irvine Ranch Market. Of course, within a decade, the major chains had lost the Latino format to local banners, the no-frills banner was launched, crashed and burned as Expo and Pavilions was scaled back & became the premium banner whereas the Vons named lived on.
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Re: Kroger to merge with Albertsons?

Post by veteran+ »

Bagels wrote: April 2nd, 2023, 2:23 pm The Albertsons-Lucky merger/ integration happened about 25 years ago. It was literally a lifetime ago: Ralphs (including F4L and Huges), Vons (including Pavilions) and Lucky-Albertson controlled over 70% market share. Today, that number is less than 40%.

Consider that just 10 years earlier, when Vons acquired Safeway's SoCal stores, Von's management said within 10 years, every store would be bannered as Pavilions (modern, large format store), Tianguis (Latino format) and two concepts under development: a no-frills banner and a premium banner that mimicked Irvine Ranch Market. Of course, within a decade, the major chains had lost the Latino format to local banners, the no-frills banner was launched, crashed and burned as Expo and Pavilions was scaled back & became the premium banner whereas the Vons named lived on.
I remember.......................................

;)
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