🛒 Kroger-Albertsons Merger: Midwest & Plains Impact

[Romr123]

There is a bit of an upscale gap in the market in Chicago with Jewel being soooo strong.


Byerly's tried to plug it 25 years ago out in the suburbs and failed.

Dominicks pre-Safeway moved to the Fresh Market concept and was about a quarter-step more upscale than Jewel (mostly because Jewel still had a goodly number of older, smaller stores rather than any gap in their performance). Dominicks also had a slightly newer/larger store base with fewer city stores.

Safeway f*ed up Dominicks...and Mariano's took on that "half-step more upscale" positioning than Jewel.

Kroger dumbed down Marianos and, so...there we are now.

There were a couple of upscale brands on the north side/North Shore suburbs (Sunset Foods/Treasure Island) which had the upscale market pretty well sewn up and were pretty well known as "the place to find the exotic stuff." Treasure Island died 15 years ago or so, Sunset Foods still has 4 locations and is probably the only multi-unit upscale grocer around.

Jewel did try to come up with a small-store branding (using it at the downtown 30k sqft store in Arlington Heights)---Jewel Osco Vail Street Market. There are some of these stores around the area along the railroad lines...they may have divested most of them to independents, though

https://lh3.googleusercontent.com/p/AF1 ... 1360-h1020

All that to say that an upscale/differentiated banner is going to be important going forward. Just like the hotel chains with elevendy-three brands whom no one can tell apart, there is a need for something different. Would be interesting to see if they could buy the Treasure Island trademark...

[buckguy]

There is a bit of an upscale gap in the market in Chicago with Jewel being soooo strong.


Byerly's tried to plug it 25 years ago out in the suburbs and failed.

Dominicks pre-Safeway moved to the Fresh Market concept and was about a quarter-step more upscale than Jewel (mostly because Jewel still had a goodly number of older, smaller stores rather than any gap in their performance). Dominicks also had a slightly newer/larger store base with fewer city stores.

Safeway f*ed up Dominicks...and Mariano's took on that "half-step more upscale" positioning than Jewel.

Kroger dumbed down Marianos and, so...there we are now.

There were a couple of upscale brands on the north side/North Shore suburbs (Sunset Foods/Treasure Island) which had the upscale market pretty well sewn up and were pretty well known as "the place to find the exotic stuff." Treasure Island died 15 years ago or so, Sunset Foods still has 4 locations and is probably the only multi-unit upscale grocer around.

Jewel did try to come up with a small-store branding (using it at the downtown 30k sqft store in Arlington Heights)---Jewel Osco Vail Street Market. There are some of these stores around the area along the railroad lines...they may have divested most of them to independents, though

https://lh3.googleusercontent.com/p/AF1 ... 1360-h1020

All that to say that an upscale/differentiated banner is going to be important going forward. Just like the hotel chains with elevendy-three brands whom no one can tell apart, there is a need for something different. Would be interesting to see if they could buy the Treasure Island trademark...

Treasure Island closed about 5 years ago. I used to live near the original store in Lakeview, which was a great place to shop. The founding family descended into chaos after the long-time co-founder died and there was a history of questionable financial dealings.

Heinen's from Cleveland has a couple stores in the Barrington area. Potash has several locations N of the loop. Chicago once had quite a few good sized local chains (like Butera) as well as other stores supplied by Certified. I wouldn't be surprised if someone tried to build a new upscale brand, probably in the Lakefront areas of Chicago and the North Shore suburbs.

[storewanderer]

There is a bit of an upscale gap in the market in Chicago with Jewel being soooo strong.


Byerly's tried to plug it 25 years ago out in the suburbs and failed.

Dominicks pre-Safeway moved to the Fresh Market concept and was about a quarter-step more upscale than Jewel (mostly because Jewel still had a goodly number of older, smaller stores rather than any gap in their performance). Dominicks also had a slightly newer/larger store base with fewer city stores.

Safeway f*ed up Dominicks...and Mariano's took on that "half-step more upscale" positioning than Jewel.

Kroger dumbed down Marianos and, so...there we are now.

There were a couple of upscale brands on the north side/North Shore suburbs (Sunset Foods/Treasure Island) which had the upscale market pretty well sewn up and were pretty well known as "the place to find the exotic stuff." Treasure Island died 15 years ago or so, Sunset Foods still has 4 locations and is probably the only multi-unit upscale grocer around.

Jewel did try to come up with a small-store branding (using it at the downtown 30k sqft store in Arlington Heights)---Jewel Osco Vail Street Market. There are some of these stores around the area along the railroad lines...they may have divested most of them to independents, though

https://lh3.googleusercontent.com/p/AF1 ... 1360-h1020

All that to say that an upscale/differentiated banner is going to be important going forward. Just like the hotel chains with elevendy-three brands whom no one can tell apart, there is a need for something different. Would be interesting to see if they could buy the Treasure Island trademark...

The current Mariano's operation is significantly more upscale than Dominick's (at the end, under Safeway) was. The stores are scaled to be "more upscale" but the quality of the stores does vary by neighborhood and the perimeter offer absolutely varies by store. But this is not necessarily different than Jewel as their stores vary by neighborhood too and some are a lot better than others. In any case the Mariano's perimeter in a given location is going to be larger, more extensive, more staffed, with a far larger assortment than the surrounding Jewel. I find this current Mariano's operation is actually really good and they really have a good thing going with how their program is with high quality perimeters and the good Kroger center store program in place even if it is higher priced than usual Kroger, it is still having a lot of good deals and the mix is really there.

Kroger was using QFC as the "upscale" format/banner before they bought Harris Teeter. We see how that went and where that is now. Kroger's heart isn't in upscale. It just isn't. They are a volume operator.

[buckguy]

Dominick's was never upscale---their base was in middle income suburbs and beyond avoiding the lowest income parts of Chicago, they were never "upscale".. It was simply different in a way that a lot of mid-market stores used to be. Some simply were better at one or more perishable lines and were able to use that to create volume and capitalize on the higher gross margins on those lines---at one time Dominick's was good with produce and later they bought Heinemann bakeries from National which carried a lot of brand equity. In contrast, no one ever went to A&P or Kroger for perishable anything, although A&P had fairly good packaged baked goods. Regional chains tended to best more national chains like A&P and Kroger by having these strengths. Jewel built a lot of its strength around bakery, deli and prepared foods, while being just ok in meat and produce--that still gave them an edge over their old time competitors and enabled them to defend well as Dominick's went through a lot of ups and downs as the original family sold, then bought back the chain and finally selling it to other and the eventual sale to Safeway.

[rwsandiego]

Dominick's was never upscale---their base was in middle income suburbs and beyond avoiding the lowest income parts of Chicago, they were never "upscale".. It was simply different in a way that a lot of mid-market stores used to be. Some simply were better at one or more perishable lines and were able to use that to create volume and capitalize on the higher gross margins on those lines---at one time Dominick's was good with produce and later they bought Heinemann bakeries from National which carried a lot of brand equity. In contrast, no one ever went to A&P or Kroger for perishable anything, although A&P had fairly good packaged baked goods. Regional chains tended to best more national chains like A&P and Kroger by having these strengths. Jewel built a lot of its strength around bakery, deli and prepared foods, while being just ok in meat and produce--that still gave them an edge over their old time competitors and enabled them to defend well as Dominick's went through a lot of ups and downs as the original family sold, then bought back the chain and finally selling it to other and the eventual sale to Safeway.

You're right - Dominick's was never "upscale." Their perishables, in my experience with their stores on Chicago's north side and in Evanston and Wilmette, were terrible. Apples looked great but were mushy on the inside, fish was spoiled the day I bought it, and meat was iffy. It seemed like once a month or so the City of Chicago closed a Dominick's for health code violations. For some reason, Dominick's employees were on the surly side, at least in the stores I shopped. I once heard a customer complaining about a rude Jewel employee to a manager say she expected that treatment at Dominick's but not at Jewel.

The sad thing is Dominick's had great meat in the 1970's and 1980's. Not sure what happened after that, but their meat went way downhill. That did improve somewhat under Safeway, but that's about all that improved.

Although Heinemann's had in-store bakeries in Dominick's, they were an independent company owned by the Dorner family. The Dorners bought the company from the Heinemann family in 1930's. They also operated locations inside of National stores and later the A&P and independent stores that were former Natioal stores. Jewel was selling their products for a while, alongside their own baked goods, in the mid-2000's.

[storewanderer]

You're right - Dominick's was never "upscale." Their perishables, in my experience with their stores on Chicago's north side and in Evanston and Wilmette, were terrible. Apples looked great but were mushy on the inside, fish was spoiled the day I bought it, and meat was iffy. It seemed like once a month or so the City of Chicago closed a Dominick's for health code violations. For some reason, Dominick's employees were on the surly side, at least in the stores I shopped. I once heard a customer complaining about a rude Jewel employee to a manager say she expected that treatment at Dominick's but not at Jewel.

The sad thing is Dominick's had great meat in the 1970's and 1980's. Not sure what happened after that, but their meat went way downhill. That did improve somewhat under Safeway, but that's about all that improved.

Although Heinemann's had in-store bakeries in Dominick's, they were an independent company owned by the Dorner family. The Dorners bought the company from the Heinemann family in 1930's. They also operated locations inside of National stores and later the A&P and independent stores that were former Natioal stores. Jewel was selling their products for a while, alongside their own baked goods, in the mid-2000's.

My understanding was the "fresh store" was considered upscale.

Maybe in this regard Mariano's is actually a more upscale format than Dominick's was. Even the Kroger version of it.

[rwsandiego]

You're right - Dominick's was never "upscale." Their perishables, in my experience with their stores on Chicago's north side and in Evanston and Wilmette, were terrible. Apples looked great but were mushy on the inside, fish was spoiled the day I bought it, and meat was iffy. It seemed like once a month or so the City of Chicago closed a Dominick's for health code violations. For some reason, Dominick's employees were on the surly side, at least in the stores I shopped. I once heard a customer complaining about a rude Jewel employee to a manager say she expected that treatment at Dominick's but not at Jewel.

The sad thing is Dominick's had great meat in the 1970's and 1980's. Not sure what happened after that, but their meat went way downhill. That did improve somewhat under Safeway, but that's about all that improved.

Although Heinemann's had in-store bakeries in Dominick's, they were an independent company owned by the Dorner family. The Dorners bought the company from the Heinemann family in 1930's. They also operated locations inside of National stores and later the A&P and independent stores that were former Natioal stores. Jewel was selling their products for a while, alongside their own baked goods, in the mid-2000's.

My understanding was the "fresh store" was considered upscale.

Maybe in this regard Mariano's is actually a more upscale format than Dominick's was. Even the Kroger version of it.

Nope. They sold the exact same merchandise as the few Dominick's stores that were not remodeled into the Fresh Store format. The differences between a new-build Fresh Store and a conventional Dominick's were size (Fresh Stores were about the size of a 1990's-build Jewel-Osco), larger produce and bakery departments (Dominick's already had extensive deli departments, sadly they pre-sliced everything, a flaw jewel exploited in a years-long ad campaign), and in some stores "restaurant-quality" prepared foods with large seating areas. The prepared food was actually very good. I found it to be better than Mariano's. Existing stores that were remodeled into Fresh Stores tended to omit the prepared foods because they tended to be smaller.

I know I am in the minority, but I find nothing about Mariano's (pre- or post-Kroger) "upscale." Their bakeries are almost as good as the various Polish, Italian, and Mexican bakeries in Chicago. No one considers them to be "upscale." The prepared food is pretty pedestrian fare and is on par with the average Chicago restaurant. The massive cheese wheel is unique and cute, I'll give them that. They have a nice spice assortment, but one can find an extensive variety of spices at Patel Brothers or any other ethnic market. Again, no one considers Patel Brothers "upscale." They have a large produce department, but so do Cermak Fresh Markets, Angelo Caputo's, and Pete's. They aren't considered "upscale," either. That's not to say Mariano's doesn't have nice stores or that they are bad. Would I shop there if I lived in Chicago and one was nearby? Sure - they are fine stores. Do I think they are amazing markets? Now that the novelty has worn off, not really.
 
Treasure Island was upscale. AJ's Fine Foods is upscale. Mariano's is no Treasure Island or AJ's.

[SamSpade]

Off Topic

Taking this further off topic to discuss Mariano's... sorry.
This is the only Mariano's I've ever been in. It felt much more luxurious (albeit smaller) than the Jewel I visited when I was in the Chicago northern suburbs (I've also been in a very pleasant Meijer).
Google Maps: Photo of Park Ridge Marianos

I've never seen something like an oyster bar where customers could sit and enjoy a beer or wine alongside a fresh off the ice oyster in any upscale grocer out west, though AJs on Camelback in Phoenix is probably close with their in-store sushi bar. This feels much more like Whole Foods used to be to me, nothing like Fry's, Smith's, or the WI Pick n' Save which felt like a large Kroger with the novel addition of an in-store popcorn bar.

[BatteryMill]

The Midwest might be the least impacted region of all if this merger goes through. By far the least amount of overlap of any region.

Northeast? As far as I know it's all Albertsons up there (Acme, Shaw's, Star Market, Kings).

[BillyGr]

The Midwest might be the least impacted region of all if this merger goes through. By far the least amount of overlap of any region.

Northeast? As far as I know it's all Albertsons up there (Acme, Shaw's, Star Market, Kings).

Not to mention several places (such as most of CT and a good chunk of NY, depending on what you want to include in what regions) that have neither company at all.