New Temecula Smart & Final

[ClownLoach]

So sad what Kroger has done to Ralphs.

A legacy that started in 1873 and was renowned for its top notch and innovative operations around the nation and indeed even overseas.

I remember when I was at King Soopers (under Dillon) we used to trade management teams with them and share best practices. I know I was very impressed with what I saw.

I did the math a few years ago somewhere here and adjusting for inflation they had lost approximately 70% of Ralphs annual revenue since 1999, and furthermore if Albertsons and Safeway had not merged the surge of Stater would put Ralphs in 4th place in the SoCal market.

That is an epic failure probably unmatched in business.

I realized that I haven't been in my neighborhood Ralphs that is about 4 blocks away in almost 3 months. Ralphs always was my favorite SoCal store and now they are the opposite of their heritage. Higher prices, lower standards.

[SamSpade]

So sad what Kroger has done to Ralphs.

A legacy that started in 1873 and was renowned for its top notch and innovative operations around the nation and indeed even overseas.

I remember when I was at King Soopers (under Dillon) we used to trade management teams with them and share best practices. I know I was very impressed with what I saw.

I did the math a few years ago somewhere here and adjusting for inflation they had lost approximately 70% of Ralphs annual revenue since 1999, and furthermore if Albertsons and Safeway had not merged the surge of Stater would put Ralphs in 4th place in the SoCal market.

That is an epic failure probably unmatched in business.

I realized that I haven't been in my neighborhood Ralphs that is about 4 blocks away in almost 3 months. Ralphs always was my favorite SoCal store and now they are the opposite of their heritage. Higher prices, lower standards.

Off Topic

I hate to also "trash" on my local Kroger operated brand, but similar feelings crept up here too. I moved some spending back to Albertsons Co's after the Safeway merger and it grew a bit more as I have seen Sankaran steer the company. Where I live, it is also likely that an ACI O&O store is the closest store for convenience.

[HCal]

This may sound wild, but hear me out.

If Kroger wants to expand in California, they should introduce the Ruler Foods format. Their attempts at conventional supermarkets clearly aren't working, but small, limited assortment stores might. Aldi had a great concept that seemed to be doing incredibly well in California, until they screwed something up (still not exactly sure what) and lost a lot of traffic. Grocery Outlet was also doing well until they weren't. Kroger can buy the leases on some of the closing 99 Cents Only stores and start a price impact format that would do quite well if they execute it correctly.

If they aren't willing to do that, then I think they should just stick with what they have. You don't have to be #1 in market share to be successful. Just keep the existing stores chugging along. If Kroger acquires Safeway Norcal, whether through the current merger or a smaller deal, I bet they will botch it.

[ClownLoach]

This may sound wild, but hear me out.

If Kroger wants to expand in California, they should introduce the Ruler Foods format. Their attempts at conventional supermarkets clearly aren't working, but small, limited assortment stores might. Aldi had a great concept that seemed to be doing incredibly well in California, until they screwed something up (still not exactly sure what) and lost a lot of traffic. Grocery Outlet was also doing well until they weren't. Kroger can buy the leases on some of the closing 99 Cents Only stores and start a price impact format that would do quite well if they execute it correctly.

If they aren't willing to do that, then I think they should just stick with what they have. You don't have to be #1 in market share to be successful. Just keep the existing stores chugging along. If Kroger acquires Safeway Norcal, whether through the current merger or a smaller deal, I bet they will botch it.

I'm not seeing anything screwed up about Aldi in most of SoCal, but I think they have a few problem districts in the OC and LA areas that struggle with execution. Otherwise they look great and have decent traffic especially in the newer stores with mostly self checkout. Because of their weird concept at checkout (handing you back your cart and you bag after paying) it is a heck of a lot more efficient to just do self checkout. They have a ton of stores in the pipeline in SoCal.

[storewanderer]

This may sound wild, but hear me out.

If Kroger wants to expand in California, they should introduce the Ruler Foods format. Their attempts at conventional supermarkets clearly aren't working, but small, limited assortment stores might. Aldi had a great concept that seemed to be doing incredibly well in California, until they screwed something up (still not exactly sure what) and lost a lot of traffic. Grocery Outlet was also doing well until they weren't. Kroger can buy the leases on some of the closing 99 Cents Only stores and start a price impact format that would do quite well if they execute it correctly.

If they aren't willing to do that, then I think they should just stick with what they have. You don't have to be #1 in market share to be successful. Just keep the existing stores chugging along. If Kroger acquires Safeway Norcal, whether through the current merger or a smaller deal, I bet they will botch it.

I don't think Ruler Foods has done all that well for Kroger. They haven't opened many of them (any?) in recent years. It seems like there is little to no marketing for the concept anymore.

I think the problem at the end of the day is these stores that run low dollar transactions, even if they are busy, the actual dollars of revenue that they generate are low. So you have Kroger who can develop a 20k square foot Ruler Foods. It may do $150k a week despite seeming "busy" the problem is the average cart is under $20 and it has limited operating hours. Or they can develop a 100k square foot Marketplace that will do over a million a week and get a higher margin mix of merchandise plus be able to offer fuel/pharmacy which can push the revenue from that site well over $2 million a week.

If I observed Ruler Foods "beating" Aldi in the Midwest I'd say this is a good idea. But I don't see Ruler Foods "beating" Aldi. The Aldi Stores have a wider assortment than Ruler Foods. Ruler Foods is actually closest to that Joe V's HEB format in terms of mix (or lack thereof). I liked Ruler Foods for staple type Kroger merchandise and all labels were represented from ST to PS (not much PS); mostly standard Kroger stuff.

However I do wonder if acquiring Grocery Outlet would make sense for Kroger. They could basically let Grocery Outlet keep doing its thing, then be the "back up" supplier for goods when Grocery Outlet has challenges securing inventory. The operator model is used by Loblaw and Sobeys up in Canada for the No Frills/FreshCo Stores which are more of a Ruler/Aldi style format.

There is a lot of real estate on retail available in California with all the 99 Only leases coming available, and I expect hundreds more closures in the drug/(what category do we consider Big Lots..) category... many of which would make great grocery stores in some format.

[ClownLoach]

This may sound wild, but hear me out.

If Kroger wants to expand in California, they should introduce the Ruler Foods format. Their attempts at conventional supermarkets clearly aren't working, but small, limited assortment stores might. Aldi had a great concept that seemed to be doing incredibly well in California, until they screwed something up (still not exactly sure what) and lost a lot of traffic. Grocery Outlet was also doing well until they weren't. Kroger can buy the leases on some of the closing 99 Cents Only stores and start a price impact format that would do quite well if they execute it correctly.

If they aren't willing to do that, then I think they should just stick with what they have. You don't have to be #1 in market share to be successful. Just keep the existing stores chugging along. If Kroger acquires Safeway Norcal, whether through the current merger or a smaller deal, I bet they will botch it.

I don't think Ruler Foods has done all that well for Kroger. They haven't opened many of them (any?) in recent years. It seems like there is little to no marketing for the concept anymore.

I think the problem at the end of the day is these stores that run low dollar transactions, even if they are busy, the actual dollars of revenue that they generate are low. So you have Kroger who can develop a 20k square foot Ruler Foods. It may do $150k a week despite seeming "busy" the problem is the average cart is under $20 and it has limited operating hours. Or they can develop a 100k square foot Marketplace that will do over a million a week and get a higher margin mix of merchandise plus be able to offer fuel/pharmacy which can push the revenue from that site well over $2 million a week.

If I observed Ruler Foods "beating" Aldi in the Midwest I'd say this is a good idea. But I don't see Ruler Foods "beating" Aldi. The Aldi Stores have a wider assortment than Ruler Foods. Ruler Foods is actually closest to that Joe V's HEB format in terms of mix (or lack thereof). I liked Ruler Foods for staple type Kroger merchandise and all labels were represented from ST to PS (not much PS); mostly standard Kroger stuff.

However I do wonder if acquiring Grocery Outlet would make sense for Kroger. They could basically let Grocery Outlet keep doing its thing, then be the "back up" supplier for goods when Grocery Outlet has challenges securing inventory. The operator model is used by Loblaw and Sobeys up in Canada for the No Frills/FreshCo Stores which are more of a Ruler/Aldi style format.

There is a lot of real estate on retail available in California with all the 99 Only leases coming available, and I expect hundreds more closures in the drug/(what category do we consider Big Lots..) category... many of which would make great grocery stores in some format.

I think the entire California business is not what Kroger has historically wanted. They like the big ticket type, big basket transactions not unlike Walmart and Target. The limited size stores in California and high costs of real estate limit their ability to build the large marketplace type stores that they prefer. As a result they get much smaller basket size, much lower average transactions.

So when you look at the relatively neglected Ralphs business, Ruler business, QFC, and other smaller formats you can see that this is par for the course for Kroger. The high shrink on general merchandise has also forced them to reduce the assortment and raise prices so they're not competitive and exist mainly as a convenience for a customer already in the store who might decide to pay a few more dollars for that Tide detergent to save a trip to Target.

I feel like Big Lots is going to just leave every site in California when the lease is up. That seems to be their current mode of operation. Many of those stores probably had long lease terms locked in at low rent and they cannot afford current market rents. I've heard the rural bit, opening stores for small town America but those again mean small time business at market rents. A Dollar General in most parts of the country looks like a metal shed with a sign out front that is built with the quality of a typical gas station convenience store, maybe even less, to keep costs to a minimum. The places Dollar General would open are too small for that 25K+ Big Lots building with a much higher cost per square foot for construction with rents too high for the limited population it would serve. In my head I imagine the small towns one drives through on the way to Zion National Park where basically either a Dollar General or a Family Dollar as the largest business in town, and suddenly a Big Lots plops itself down even though all of "downtown" could fit in their smaller size format? That is not going to happen. They're doomed.

[ClownLoach]

This may sound wild, but hear me out.

If Kroger wants to expand in California, they should introduce the Ruler Foods format. Their attempts at conventional supermarkets clearly aren't working, but small, limited assortment stores might. Aldi had a great concept that seemed to be doing incredibly well in California, until they screwed something up (still not exactly sure what) and lost a lot of traffic. Grocery Outlet was also doing well until they weren't. Kroger can buy the leases on some of the closing 99 Cents Only stores and start a price impact format that would do quite well if they execute it correctly.

If they aren't willing to do that, then I think they should just stick with what they have. You don't have to be #1 in market share to be successful. Just keep the existing stores chugging along. If Kroger acquires Safeway Norcal, whether through the current merger or a smaller deal, I bet they will botch it.

I'm not seeing anything screwed up about Aldi in most of SoCal, but I think they have a few problem districts in the OC and LA areas that struggle with execution. Otherwise they look great and have decent traffic especially in the newer stores with mostly self checkout. Because of their weird concept at checkout (handing you back your cart and you bag after paying) it is a heck of a lot more efficient to just do self checkout. They have a ton of stores in the pipeline in SoCal.

So I said this and then walked into my usual perfect Aldi store today in the afternoon. First time I've been there in a month. I am pretty sure the manager was moved and replaced. Might as well be a different store and it reveals some of @storewanderer concerns. First off, whoever the new manager is has no clue what they're doing. The store was a disaster area with out of stock everywhere and every department. Second, the routines and processes clearly collapsed. Floor was filthy and sticky like it hadn't been cleaned in a week. Date rotation issues galore with cheeses and others dated a month apart all mixed together and usually newest in front. And the other issue is that the store had to have been slammed busy like most grocery stores were Saturday, but the limited staffing and scheduling model has put this store behind the 8 ball. I saw two employees working. One cashier, and one person trying to make sense of whatever happened to the produce area. That store needed half a dozen more workers immediately to straighten, recover, rotate dates, cull bad perishables and clean. But the Aldi staffing levels don't call for it so they're just watching the store burn. I wound up visiting Ralphs who obviously is practicing to be priced as the Neiman Marcus of grocery stores and they were rough from all the business but still presentable and clean even if not necessarily stocked. I'm not sure the usual Aldi staff, led by a new manager that is clearly in over their head, could fix that store in a week.

[storewanderer]

So I said this and then walked into my usual perfect Aldi store today in the afternoon. First time I've been there in a month. I am pretty sure the manager was moved and replaced. Might as well be a different store and it reveals some of @storewanderer concerns. First off, whoever the new manager is has no clue what they're doing. The store was a disaster area with out of stock everywhere and every department. Second, the routines and processes clearly collapsed. Floor was filthy and sticky like it hadn't been cleaned in a week. Date rotation issues galore with cheeses and others dated a month apart all mixed together and usually newest in front. And the other issue is that the store had to have been slammed busy like most grocery stores were Saturday, but the limited staffing and scheduling model has put this store behind the 8 ball. I saw two employees working. One cashier, and one person trying to make sense of whatever happened to the produce area. That store needed half a dozen more workers immediately to straighten, recover, rotate dates, cull bad perishables and clean. But the Aldi staffing levels don't call for it so they're just watching the store burn. I wound up visiting Ralphs who obviously is practicing to be priced as the Neiman Marcus of grocery stores and they were rough from all the business but still presentable and clean even if not necessarily stocked. I'm not sure the usual Aldi staff, led by a new manager that is clearly in over their head, could fix that store in a week.

At least it has self checkout? I have yet to encounter a SoCal unit with self checkout... only seen that in the midwest so far. And where I saw it there was obviously older/mature locations. I find it interesting they are adding self checkout to established locations in the midwest, but not quickly getting it added into the earlier CA openings that don't have it.

Kroger pricing is getting worse every week. I am shocked at the increases I see mid week every week at Smiths when I walk their center store. I've been wondering if they are trying to move Reno closer to CA style pricing but then I will pull a Smiths in Utah on the app and start checking items/prices there and see the same prices. Meat also has had pretty big increases recently. Produce is still mostly priced okay. Bakery looks priced similar to how it has been but noticed the cookie package got smaller, however also noticed all cake slices back down to 2.50 (Smiths has large square ones that are done in store and are actually quite good) after seeing some flavors as high as 3.99 for a while and then some down to 2.29 for some reason, then others at 2.99 or 2.50. They seem to have cleaned that up and gotten all flavors back down to 2.50. They are still way cheaper than Safeway/Raleys/Save Mart storewide, but that isn't saying much.

You basically have to play around using the app with Kroger now to get what were previously the old walk in sale prices. I use the app and most items I buy have some kind of app discount/offer attaching. Interesting on the larger weekend visit there this weekend 3 of the probably 15 app offers I redeemed were manufacturer coupons... rather than store coupons. That was interesting to me. They have a 4x fuel point promotion going. I spent around $40 and earned 244 fuel points, so not quite sure how they compute things. The value of the manufacturer coupons (which get included toward fuel points earning) was nowhere near $20. It seems it may have awarded me points before the "buy 5 save $5" offers.

[ClownLoach]

So I said this and then walked into my usual perfect Aldi store today in the afternoon. First time I've been there in a month. I am pretty sure the manager was moved and replaced. Might as well be a different store and it reveals some of @storewanderer concerns. First off, whoever the new manager is has no clue what they're doing. The store was a disaster area with out of stock everywhere and every department. Second, the routines and processes clearly collapsed. Floor was filthy and sticky like it hadn't been cleaned in a week. Date rotation issues galore with cheeses and others dated a month apart all mixed together and usually newest in front. And the other issue is that the store had to have been slammed busy like most grocery stores were Saturday, but the limited staffing and scheduling model has put this store behind the 8 ball. I saw two employees working. One cashier, and one person trying to make sense of whatever happened to the produce area. That store needed half a dozen more workers immediately to straighten, recover, rotate dates, cull bad perishables and clean. But the Aldi staffing levels don't call for it so they're just watching the store burn. I wound up visiting Ralphs who obviously is practicing to be priced as the Neiman Marcus of grocery stores and they were rough from all the business but still presentable and clean even if not necessarily stocked. I'm not sure the usual Aldi staff, led by a new manager that is clearly in over their head, could fix that store in a week.

At least it has self checkout? I have yet to encounter a SoCal unit with self checkout... only seen that in the midwest so far. And where I saw it there was obviously older/mature locations. I find it interesting they are adding self checkout to established locations in the midwest, but not quickly getting it added into the earlier CA openings that don't have it.

Kroger pricing is getting worse every week. I am shocked at the increases I see mid week every week at Smiths when I walk their center store. I've been wondering if they are trying to move Reno closer to CA style pricing but then I will pull a Smiths in Utah on the app and start checking items/prices there and see the same prices. Meat also has had pretty big increases recently. Produce is still mostly priced okay. Bakery looks priced similar to how it has been but noticed the cookie package got smaller, however also noticed all cake slices back down to 2.50 (Smiths has large square ones that are done in store and are actually quite good) after seeing some flavors as high as 3.99 for a while and then some down to 2.29 for some reason, then others at 2.99 or 2.50. They seem to have cleaned that up and gotten all flavors back down to 2.50. They are still way cheaper than Safeway/Raleys/Save Mart storewide, but that isn't saying much.

You basically have to play around using the app with Kroger now to get what were previously the old walk in sale prices. I use the app and most items I buy have some kind of app discount/offer attaching. Interesting on the larger weekend visit there this weekend 3 of the probably 15 app offers I redeemed were manufacturer coupons... rather than store coupons. That was interesting to me. They have a 4x fuel point promotion going. I spent around $40 and earned 244 fuel points, so not quite sure how they compute things. The value of the manufacturer coupons (which get included toward fuel points earning) was nowhere near $20. It seems it may have awarded me points before the "buy 5 save $5" offers.

Some updates. First off, Ralphs is running noticeably lower prices on many items in Temecula versus Murrieta. I think they possibly were allowed to skip the last batch of price increases. Or they are very behind in applying them.

The Ralphs in Temecula is a much busier store than Murrieta. I asked. Second to Menifee in the market. Solves the "slow" question. Does a ton of Pickup orders apparently. Much better executed store overall, more professional staff. Still don't understand how changing the floor warranted a grand reopening although deli got new cases that are different from what I've seen at other Ralphs.

The Smart and Final is dead and struggling. Last week it was a cesspool of rotting produce. It has been cleaned up today, apparently they needed outside help from other stores to fix it.

And Stater Bros is finally celebrating their grand opening. I'll go there next time, it was nice but felt like it was missing something last time I was in. Similar feeling to the Oceanside one when it appeared "done" but also went a month plus before grand reopening. I think they reduce assortment in perimeters during remodels and do not restore until grand reopening which might contribute to the feeling of emptiness especially produce.

This street still pulls customers from a far distance out CA-79 to the hills in Anza and elsewhere.

[storewanderer]

I wonder if the gas station in Murrieta makes them any money. When Kroger watches sales for stores they exclude fuel and pharmacy since those areas aren't considered "controllable" by store management in driving sales. So the gas station may help the overall picture in Murrieta.

Do any of these Ralphs have a 6.99 sandwich? A Ralphs around Marina Del Rey had this- you go to pick from I think it was 4 pre-determined options- using Boar's Head meats. This wasn't like the old Ralphs sandwich program but people were lined up. Also forget getting other deli product because the employee was completely trapped making sandwiches. Kind of felt like how Sprouts does its program and neglects the rest of deli. The biggest problem with this 6.99 sandwich was it used a Ralphs bakery "bolillo" roll - this roll is trash, poor quality... if it is an hour or two old it is okay but after that it is no good. The old Ralphs sandwich program took finished/fully baked "Maple Leaf" baguettes (bakery also sold them par baked as a take and bake baguette), baked them the rest of the way, and used those for the custom sandwich bread; I really liked those.

No surprise on Smart & Final. Let's see if they even survive there. But they always seem to survive. I've wanted to buy items in the Reno one three times in the past month- walked out two of those three times due to excessive line lengths at 1-2 open registers. On the other visit I was about to walk out but the Store Director noticed the lines and opened a register. If the other cashiers were as fast as he was, they wouldn't have lines.