🛒 Kroger-Albertsons Merger: Mid-Atlantic Impact

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🛒 Kroger-Albertsons Merger: Mid-Atlantic Impact

Post by submariner »

A place to discuss the impact of the Kroger-Albertsons merger, specifically on the mid-atlantic region.
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Re: 🛒 Kroger-Albertsons Merger: Mid-Atlantic Impact

Post by Knight »

Retail Watchers recognizes the mid-Atlantic United States as Delaware, Maryland, Pennsylvania, Virginia, and West Virginia.

Ten Harris Teeter stores in the District of Columbia, Maryland, and Virginia would be divested. (PR Newswire)

Reorganization among Albertsons' East Region (Acme Division, Eastern Division, Jewel-Osco Division, and Shaw's Division) and Kroger's Mid-Atlantic Division and Harris Teeter could be possible.

The Washington area will have one less competitor with Safeway and Harris Teeter becoming the same entity. Other supermarket competitors include Ahold Delhaize (Giant, Food Lion), Weis, and Shoppers. It remains to be seen how CSWG will handle the ten acquired Harris Teeter stores. Another competitor, Publix, is knocking on the door.
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Re: 🛒 Kroger-Albertsons Merger: Mid-Atlantic Impact

Post by mjhale »

I'm very curious to see the list of ten Harris Teeter stores that are proposed to be divested. I want to see how close they are to existing Safeway stores primarily. My initial thought when the merger was first announced was that Kroger would want to offload the Safeway stores since they are not native to Kroger. Then again, Safeway and Harris Teeter both have their areas of strength in the sense of store concentration not necessarily market share. For example, Safeway has long been established in the closer in Virginia suburbs. Compare that with Harris Teeter who has a nice concentration of stores and market share in Loudoun County. I believe BatteryMill posted a link to a 2020 article in another thread that said Harris Teeter has over 20 percent market share in Loudoun.

I do have the same concern about the loss of a competitor. In the great average middle of grocery stores in the DC area, it is Safeway vs Giant. Shoppers still has mass in PG county but elsewhere they are down to only a couple of stores in Montgomery and Fairfax Counties. The Baltimore area still has all three in most areas but even there Shoppers has been closing stores though not as much as in the DC area. My belief is that Harris Teeter views itself as being above Giant and Safeway when perhaps they are not as high up the food chain as they think they are. Nonetheless, leaving the great middle essentially only to Giant post merger isn't the greatest of plans. If a competitor were to come in for the ten stores now and any more in the future the situation could be different. However, that competitor has to be someone who can actually make things happen, not whoever C&S can pass off stores onto to make it look like they are trying to preserve competition.
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Re: 🛒 Kroger-Albertsons Merger: Mid-Atlantic Impact

Post by msteph0819 »

mjhale wrote: October 30th, 2023, 10:59 am I'm very curious to see the list of ten Harris Teeter stores that are proposed to be divested. I want to see how close they are to existing Safeway stores primarily. My initial thought when the merger was first announced was that Kroger would want to offload the Safeway stores since they are not native to Kroger. Then again, Safeway and Harris Teeter both have their areas of strength in the sense of store concentration not necessarily market share. For example, Safeway has long been established in the closer in Virginia suburbs. Compare that with Harris Teeter who has a nice concentration of stores and market share in Loudoun County. I believe BatteryMill posted a link to a 2020 article in another thread that said Harris Teeter has over 20 percent market share in Loudoun.

I do have the same concern about the loss of a competitor. In the great average middle of grocery stores in the DC area, it is Safeway vs Giant. Shoppers still has mass in PG county but elsewhere they are down to only a couple of stores in Montgomery and Fairfax Counties. The Baltimore area still has all three in most areas but even there Shoppers has been closing stores though not as much as in the DC area. My belief is that Harris Teeter views itself as being above Giant and Safeway when perhaps they are not as high up the food chain as they think they are. Nonetheless, leaving the great middle essentially only to Giant post merger isn't the greatest of plans. If a competitor were to come in for the ten stores now and any more in the future the situation could be different. However, that competitor has to be someone who can actually make things happen, not whoever C&S can pass off stores onto to make it look like they are trying to preserve competition.
I wouldn't be shocked to see the three remaining HT locations in the District close.

I just feel like HT doesn't run stores in urban locations well.

I used to live a block away from the HT store in DC on 1st NE. Despite HT's proximity, I would ride my bike to the Safeway on L St NW that was roughly 10 minutes away.

Both stores are the same size - roughly 55k sqft, but the Safeway for some reason felt less chaotic and had a better selection of practically everything. You felt like you were in a grocery store in the suburbs.

The weird format of the HT store just made the store feel like a mess and I felt like too much of the floor space was wasted on prepared/takeaway food (not sure if that's still the case). There always seemed to be constant long lines and they always seemed to be out of whatever I needed.

I feel the same about the other weird HT location in NW DC that occupies the former roller rink - literally one of the strangest grocery stores I have ever been to. That's my closest grocery store, but I either walk up the hill to the "Spanish" Safeway on Columbia Rd or the "Soviet" Safeway in Dupont Circle. Both Safeway's are considerably smaller than the HT and are two of the last small-format Safeway's in the DMV. Despite their size, both seem better run (and have better pricing/selection) than the larger HTs in the District.
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Re: 🛒 Kroger-Albertsons Merger: Mid-Atlantic Impact

Post by buckguy »

The L Street Safeway is much bigger than the 1st St H-T. The H-T does a decent business--I'd agree the layout is a problem. The Pharmacy never has customers and easily could go which would open up space, along with getting rid of the prepared foods island in the produce section. The new Trader Joe's near Union Market is a serious competitor.

The North Bethesda H-T seems like a candidate for closing---never busy, odd location, weak prepared foods and it will be finished off by the new Wegman's on Rockville Pike. It's part of a condo complex, so it would be difficult to convert into the kind of home improvement businesses that dominate nearby parts of Rockville. I haven't been to the new one in Bethesda but it's in a weak location and the new Trader Joe's (replacing a tiny store) is better located to draw from all the new development on Wisconsin Ave.

There are some other small Safeways--Chevy Chase Village, the oddly laid-out one in Rosslyn come to mind.

Giant and Safeway have had the lion's share of the great middle of the DC market since at least the 70s. A&P was an atypically small operation, Food Fair & Acme never had much market share. Only Grand Union was much of a competitor and they had a very uneven operation, unevenly distributed around the area. TJs, WF, and Costco have much more penetration here than in most places
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Re: 🛒 Kroger-Albertsons Merger: Mid-Atlantic Impact

Post by storewanderer »

I never understood what H-T was doing in DC/MD/VA. I have yet to be impressed with any locations I've visited in those places. Many locations appear to be too high cost of real estate and likely not very profitable if profitable at all. That is probably why they're getting divested. My initial experiences with H-T were in DC/MD/VA then in Nashville and despite the flashy looking stores I thought the prices were too high and the quality was marginal to lousy, and the service was also not very good. The next experience I had with H-T was that lone FL Store and the execution, service, and mix seemed better but the store seemed too small, at the time (this was over 10 years ago). More recently in DC/MD/VA those H-T Stores don't seem to have the shine they once did as they age, continue to have lousy perishables considering what they charge, seem to be getting dirty, and overall aren't a place I'd shop unless convenient. I hate to say I'd probably opt for Safeway instead of them most of the time given the choice between the two only, but I think I probably would. Fortunately there are a lot of other choices. Easy to avoid both.

Once in the Carolinas I better understood what was so great about H-T. But they just run a way better store in the Carolinas.
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Re: 🛒 Kroger-Albertsons Merger: Mid-Atlantic Impact

Post by buckguy »

storewanderer wrote: November 7th, 2023, 11:30 pm I never understood what H-T was doing in DC/MD/VA. I have yet to be impressed with any locations I've visited in those places. Many locations appear to be too high cost of real estate and likely not very profitable if profitable at all. That is probably why they're getting divested. My initial experiences with H-T were in DC/MD/VA then in Nashville and despite the flashy looking stores I thought the prices were too high and the quality was marginal to lousy, and the service was also not very good. The next experience I had with H-T was that lone FL Store and the execution, service, and mix seemed better but the store seemed too small, at the time (this was over 10 years ago). More recently in DC/MD/VA those H-T Stores don't seem to have the shine they once did as they age, continue to have lousy perishables considering what they charge, seem to be getting dirty, and overall aren't a place I'd shop unless convenient. I hate to say I'd probably opt for Safeway instead of them most of the time given the choice between the two only, but I think I probably would. Fortunately there are a lot of other choices. Easy to avoid both.

Once in the Carolinas I better understood what was so great about H-T. But they just run a way better store in the Carolinas.
They entered the DC area when Giant was at its nadir under Ahold. They saw an opening in a an affluent, growing market.

Their locations inside the Beltway and in Maryland tend to be a little odd and probably represent developers being willing to cut favorable deals. The North Bethesda one is away from any thoroughfare and was part of a condo development that never quite blossomed the way it was expected---the other new development in the area is to the North or the West and its market area is hemmed in by railroad tracks. The DC locations included a new neighborhood (NoMA) that was probably too close to existing Giant and Safeway stores to be attractive to those chains as well as a little speculative as place to operate retail. The Bethesda and Hill East (now closed, replaced by one a mile away) stores were in new condo developments but either too close to existing stores (Safeway in Hill East) or in the least desirable location in terms of new development and market area (Bethesda). The Adams-Morgan location was a legacy commercial property in a residential neighborhood and away from any thoroughfare---they probably got a very favorable rental and saw the nearby Safeways as easy competition.
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