Haggen to close, liquidate 100 more stores

[klkla]

Here's some interesting news. Gelson's posted on their site today details about the transaction but they only list six stores, not eight. The Laguna Beach store and Carlsbad stores are not included on the list. These were the two stores owned by Spirit (the company Haggen sold stores to earlier this year and then leased them back). I wonder what went wrong?

https://www.gelsons.com/press-releases

Edit: Here's what went wrong:

http://www.latimes.com/socal/coastline- ... story.html

[pseudo3d]

I agree it would be difficult for one of the majors to open a Hispanic format store now. That ship has already sailed. There are too many established players now that have lower operating costs.

Well, a full chain would still be difficult, at least from the ground up or immediately. Remerchandising would be the first step, but really, discounting the entire idea from some failures in the early 1990s is an incorrect conclusion. Texas chains have figured it out, can SoCal chains not do the same? The highly competitive nature of the existing segment is a real barrier, though, but at least it's an established demographic, which unlike Haggen's choice, does exist.

[CalItalian]

I agree it would be difficult for one of the majors to open a Hispanic format store now. That ship has already sailed. There are too many established players now that have lower operating costs.

Well, a full chain would still be difficult, at least from the ground up or immediately. Remerchandising would be the first step, but really, discounting the entire idea from some failures in the early 1990s is an incorrect conclusion. Texas chains have figured it out, can SoCal chains not do the same? The highly competitive nature of the existing segment is a real barrier, though, but at least it's an established demographic, which unlike Haggen's choice, does exist.

Haggen's problem was price. The former customers from the converted Vons and Albertsons stores came in and saw much higher prices on the same merchandise in, basically, the same store. It was a shock even in more affluent communities. The news spread like a wildfire. They also converted stores where the Albertsons or Vons was already overpriced for that neighborhood. Haggen was chasing a customer that they were never going to get and the vast majority of Vons and Albertsons customers were not them. They would have done just fine, maybe succeeded, if they had come in with the same prices or lower than Vons/Albertsons and some extreme loss leaders for a very extended period of time to create excitement. Their ad specials were just pathetic as was quality control in their meat department. They also suffered from poor p.r. when they layed off employees within weeks of opening a store. Customers, including myself, actually became angry at them. They were never going to recover from that.

You're just not understanding that Southern California is already built out for Hispanic grocery chains, most that target the Mexican customer. They also have plenty of options such as meat (carnicería) markets, neighborhood stores, 99 Cents stores (which are hugely popular with the Latino customer). With Aldi coming into the market, I expect they will get Hispanic customers but only because of price not selection. Even Walmart couldn't figure it out with their defunct Supermercado & Mas Club stores...that should tell you that even remerchandising doesn't work when the big boys are trying to figure it out (Even in Florida, Publix Sabor stores look nice but they're not setting the market on fire...).

[CalItalian]

Gelson's already remodeling Haggen stores
http://www.nbcsandiego.com/news/local/G ... 49901.html

[kr.abs.swy]

I was in the Boulder City Haggen (80s-ish former Vons, just a stone's throw from a 10-15-ish-year-old Albertsons) on Saturday. I was very surprised by the quantity of Safeway brand products still in the store -- lots of vitamins, a few food items, some health and beauty, and a few cleaners. I also noticed quite a few health and beauty items with the "Intended for sale at Vons store XXXX" stickers on them. These were still in stock despite the fact that they are well into the going-out-of-business sale and the stores will be closed very soon.

Why Haggen didn't negotiate that they were going to buy house-brand products at something like half of cost and then immediately mark them down by at least 50% on the first day that the stores reopened as Haggen so that they could make more room for their own assortment is beyond me. When you are shopping in a store that you know hasn't been Vons for many months and you see Safeway brand products, the first thing you start to wonder about is how old the product on the shelves is. They needed to get their own assortment of products on the shelves ASAP to differentiate themselves, especially given the price increases. The way they executed these changeovers continues to baffle me.

There has also been a lot of Haggen brand merchandise that is being liquidated. Clearly a warehouse somewhere is being cleared out of store brand goods.

They didn't seem to be selling any of the equipment in the deli and bakery areas, so Albertsons should be able to move back in easily.

The third party that operates the in-store casinos had removed all of their equipment.

In the Boulder HIghway former Albertsons, the Wells Fargo branch continued to operate. I didn't see any signs indicating a pending branch closure.

I was in three Haggen stores in the past five or so days. One of the stores still had quite a bit of fresh produce, while one of the others was down to only a few items. I really don't understand why they would be selectively stocking produce in these stores.

I know that picking on Haggen management has become cliché, but I just don't understand why they didn't negotiate a better deal regarding house brand items, and then have a fire sale on Day 1 so that they could get their own assortment in.

[pseudo3d]

I had read that their supplier, in the SW Pacific division, at least, was Supervalu. I'm surprised that they had a brand----I would've expected to see Essential Everyday products.

[kr.abs.swy]

I saw a surprising amount of Haggen private-label goods, including crackers, microwave popcorn, frozen waffles, peanut butter, juices, jelly, canned fruit and cereal. For such a small chain, it was a surprisingly ambitious private label effort. This is just what I noticed at the going-out-of-business sale (and I wasn't looking too carefully); presumably there were more products that have sold out.

[klkla]

In the Southwest the Haggen products were distributed by Unified. I would guess that once the court approved the critical vendor payments and they got paid Unified wanted to get rid of the product ASAP so likely a lot of that product has been delivered in the last two to three weeks.

[storewanderer]

Haggen always had that large private label line, sourced through Topco, even back in the 1990's. Most of the packages are the same old packages from the 1990's but some are redesigned (the ones with the Haggen logo in a rectangle). It was a strong private label effort for such a small chain.

Topco and Penske were both owed many millions of dollars in the bankruptcy and I suspect that is all private label goods related. Probably something to do with trucking the private label items from WA to CA.

I wonder what the closing date for these stores is. Maybe we will find out tomorrow as many sales will be given final approval.

[pseudo3d]

From one of the articles, it looked like Albertsons was going to revert their acquired stores to their original names. Does this hold true in all cases, or just a handful?