Integration of Albertsons and Safeway

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pseudo3d
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Re: Integration of Albertsons and Safeway

Post by pseudo3d »

architect wrote:Interesting advertisement out of DFW: this morning, I heard a co-branded Tom Thumb-Albertsons ad promoting their Monopoly game. This was heard on a CBS Radio-owned station, but through their online listening platform. I only heard this ad once, but heard several more for either Tom Thumb or Albertsons (with the Tom Thumb ads using the typical Safeway background jingle). I'm not sure if this is an isolated ad, or if Albertsons has plans to combine the two chains' ad programs.
I heard a radio ad (probably very similar) for Randalls monopoly. They probably had different markets with their respective stores.

Other things to note:

I haven't been able to find out if Albertsons and Safeway have merged buying yet, or are still on separate systems. That *may* be the key to lowering prices.
The produce streamlining put into place at ACME and new Safeway stores has yet to be seen at Randalls. Produce in barrel fixtures, cluttered cross merchandising...would be nice to see changes!
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Re: Integration of Albertsons and Safeway

Post by storewanderer »

The Monopoly game is over. The stores stopped distributing pieces last week. I am not sure why there would still be radio ads for it.

Safeway has had the produce in barrel fixtures/crate fixtures/wavy bell pepper display since before the Albertsons merger in some locations.

I noticed the displays in Florida were similar but not quite the same as what I see out west.

The buying situation is still a work in progress. Pre-existing contracts for private label in some markets so they can't shift production of some items like milk over to Safeway plants in all markets just yet, closing some Safeway manufacturing plants and shifting to third party vendors (need to sign a contract to cover both Safeway and Albertsons in those instances to get a better deal), scattered/random private label still coming from SuperValu...

But Kroger did go through and lower a large set of center store retails in Harris Teeter and it appears they are not yet on combined buying. If Kroger can do that, why can't Albertsons do it? Albertsons and Safeway have always been very high priced operators and it is no secret. I don't think pricing competitively is in the combined company's DNA. They have their heads in the sand for many years when it comes to pricing and refuse to face the reality that their outrageously high everyday retail pricing needs to be reworked.

It takes many years to do price cuts. You can't just go through and do a 20% across the board cut one day. Kroger has been tinkering with pricing for a decade and they still have some retails that are higher than they should be... but their everyday low price program started out slow, with just a few hundred items scattered around the store, a mix of brand names and private label. Then year after year they added additional groups of items. It takes time. It is called investing in price, and at the same time finding expense cuts in other areas to help pay for those investments in price. Albertsons has also cut a lot of expenses backstage and yet we still are seeing no sign of investing in price. I believe Albertsons has many more expenses they can cut, redundant distribution centers, some redundant stores, redundant marketing programs, etc. where they can continue to find savings but will they put that savings toward investing in price (they haven't yet) or will they just put that savings to the next quarterly profit report and show higher profits that quarter but in no way actually help increase customer satisfaction (seems to be the current strategy).
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Re: Integration of Albertsons and Safeway

Post by pseudo3d »

storewanderer wrote:The Monopoly game is over. The stores stopped distributing pieces last week. I am not sure why there would still be radio ads for it.
This was a few weeks ago, I know it's late, but I just wanted to mention that. Advertising never seemed to be Safeway's strong suit...I've seen contemporary H-E-B ads (usually pushing the "Texas" angle) and Kroger ads (usually pushing the "good quality, low price" angle) but never contemporary Randalls ads (the old ones used to star Randall Onstead himself).
Safeway has had the produce in barrel fixtures/crate fixtures/wavy bell pepper display since before the Albertsons merger in some locations.
My point was that the newer ACMEs, the reset A&P stores, and the new Safeway stores have modified, streamlined produce displays. Changing that sort of thing isn't a remodel-level task, and I was curious if it was just a "new store only" thing or a "throughout the chain" task.
The buying situation is still a work in progress. Pre-existing contracts for private label in some markets so they can't shift production of some items like milk over to Safeway plants in all markets just yet, closing some Safeway manufacturing plants and shifting to third party vendors (need to sign a contract to cover both Safeway and Albertsons in those instances to get a better deal), scattered/random private label still coming from SuperValu...

But Kroger did go through and lower a large set of center store retails in Harris Teeter and it appears they are not yet on combined buying. If Kroger can do that, why can't Albertsons do it? Albertsons and Safeway have always been very high priced operators and it is no secret. I don't think pricing competitively is in the combined company's DNA. They have their heads in the sand for many years when it comes to pricing and refuse to face the reality that their outrageously high everyday retail pricing needs to be reworked.

It takes many years to do price cuts. You can't just go through and do a 20% across the board cut one day. Kroger has been tinkering with pricing for a decade and they still have some retails that are higher than they should be... but their everyday low price program started out slow, with just a few hundred items scattered around the store, a mix of brand names and private label. Then year after year they added additional groups of items. It takes time. It is called investing in price, and at the same time finding expense cuts in other areas to help pay for those investments in price. Albertsons has also cut a lot of expenses backstage and yet we still are seeing no sign of investing in price. I believe Albertsons has many more expenses they can cut, redundant distribution centers, some redundant stores, redundant marketing programs, etc. where they can continue to find savings but will they put that savings toward investing in price (they haven't yet) or will they just put that savings to the next quarterly profit report and show higher profits that quarter but in no way actually help increase customer satisfaction (seems to be the current strategy).
There's a number of redundancies Albertsons can cut still, but I think it's a little unfair to compare it to Kroger. Kroger is a well-run, well-integrated company and has been continuing more or less on a solid path for a few decades (when was the last time Kroger pulled out of a market?) and doesn't have to pay down a lot of debt from a company (or two) that wasn't performing particularly well (maybe Roundy's being the notable exception, but it's on far less of a scale than Safeway was). I would even go so far to venture that Kroger did price cuts at Harris Teeter because they had the financial resources to, even if they took on a loss.

As for high prices, I know Albertsons always had high prices for years, though it seems that only really happened after American Stores. In the early 1990s it was actually pretty competitive from other accounts I read, and even in Dallas they went in with an EDLP program that claimed to beat Tom Thumb, Kroger, Safeway, and Skaggs Alpha Beta on price (never mind that they bought all of those but one, ultimately). Safeway I'm less sure on since there hasn't been a real Safeway in Texas since before I was born. I do remember reading (in old articles) that one of AppleTree's goals was to have a reputation for lower prices as Safeway had a reputation for higher prices, but that was in the 1980s. But Safeway was also always a reasonably priced supermarket too in the old days. Either you or klkla mentioned great deals they ran on store brand items, and while it wasn't the lowest game in town, it was certainly middle of the road. Also, my observations have seen (and this seems to be backed up by your Florida observations) that Albertsons/Safeway is competitive on things like milk and some other perimeter items, which is at least a start. This certainly wasn't the case with Safeway c. 2005 with WFM-levels of pricing for things like orange juice.

Not sure what the thing on DCs is, as I did read that Albertsons was going to get rid of some of the overlapping centers (mostly Vons) in SoCal by leasing them short-term then divesting them completely, but I also have found that the Safeway drivers for Randalls don't work with driving to Louisiana at all, even though Albertsons-branded trucks have seen going in and out of the center. I'm not sure if it's residual Supervalu or not (I don't think they have LLC drivers).
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Re: Integration of Albertsons and Safeway

Post by veteran+ »

Guess I have been around too long but I worked for both Safeway and Kroger (and a few other big chains) and Safeway has never been known for good prices. As a customer and an employee, from New York (way back then) to Colorado and California..............price has not been a strong point for Safeway or any of it's divisions. I do love what they have done with their organics line and believe it is the most extensive organic private label in the retail grocery business (number of skus and good quality and availability).

In the days of Joe Albertsons, this company did a good job on prices as well as store conditions, customer service and many gorgeous combo stores. Albertsons was always known for awesome variety. The only time I was not impressed with Albertsons was years ago when I visited Laguna Beach (small, disheveled, poor customer service...a real mess). Today, I believe they still excel in variety and their customer service is good (better attitude than Ralphs or Vons).

Kroger has been the sleeping giant that for decades was so careful and prudent that very little happened. They were stable but boring and usually did new things "last". Today Kroger is still careful but they are taking smart chances and behaving more aggressively than ever before. They are not even afraid to take on Walmart and they are succeeding. I sure wish I would have saved my stock ownership!!!
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Re: Integration of Albertsons and Safeway

Post by klkla »

veteran+ wrote:price has not been a strong point for Safeway or any of it's divisions.
I agree with your last post. What's funny is that 'SafeWay Cash & Carry' as it was originally introduced was a discount format. In those days customers typically bought their groceries on credit and paid their bill on payday. But because so many customers would move out of town before payday the cost of doing business this way had to be passed on in the form of higher prices. Safeway survived the great depression because they had lower prices and wasn't owed any money by customers when the economy collapsed.
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Re: Integration of Albertsons and Safeway

Post by pseudo3d »

Saw a coupon for Signature brand coffee at Randalls. It was $1 off but featured different bar codes if it was an Albertsons or Randalls. Even though they are on different systems, it should have more or less the same effect, right?

As an aside, I've felt that the Signature brand roll-out wasn't done all that well considering that for Safeway stores it's the same stuff (often with the same design) under a different name. They didn't even try to promote it with samples.
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Re: Integration of Albertsons and Safeway

Post by High Plains Traveler »

Integration of the stores in SE Colorado is essentially complete. The chains run separate, but almost identical ads in our local paper each Wednesday, with similar specials at both stores. Even the typeface for the Albertsons ads has transitioned to the Safeway format. Albertsons now carries Signature Kitchens bread, albeit in the reduced selection that is now available since Safeway closed their Denver bakery.

We took an RV trip southwest to Arizona and California in late March and early April, and as luck would have it, our shopping was almost exclusively done at Vons and Albertsons. I was surprised to see an Albertsons in Yuma that still sold Albertsons brand milk, distributed by SuperValu.
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Re: Integration of Albertsons and Safeway

Post by kr.abs.swy »

I saw similar lighting "enhancements" at the Windmill store in Henderson, Nevada, this week. Just like in your pictures, they had bolted bare fluorescent strips on to the end of the Lifestyle lights at some places, had added a row of fluorescent strips across the rear perimeter, had added fluorescent strips in produce, and had added a bunch of fluorescent strips in the liquor area.

They were still doing the work, so most of the new lighting wasn't on, but it looked absolutely hideous. Bolting the cheapest fixtures they could possibly find onto the Lifestyle strips looks ridiculous.

The people on this board tend to notice things that 90% to 95% of customers don't notice ... I get that most customers are just happy if the store has what is on their list, at a reasonable price, and they don't have to wait in line ... but the new lights give the store such a low-rent feel that I can't imagine that some customers aren't going to notice. It just feels like someone said "we need to double the lighting in here for the cheapest possible price, and I don't care how it looks as long as this place glows like the sun." It wouldn't be such a big deal if there weren't higher-end fixtures throughout the store, but mixing the Lifestyle fixtures and the cheap new fixtures makes for an awful downgrade.

They were also making some changes to the meat display case and the service meat counter was closed for the day.
klkla wrote:
architect wrote:Finally got photos of the tacky fluorescent light fixtures being used in most of the drop-ceiling Tom Thumbs. Note the new fixtures compared to the old in the second photo. And for the record, this store was opened in 2013 and already looks outdated, especially with this lighting "upgrade."

Image
Image
I was near the Pavilions in Hollywood today so I dropped in real quick to show how it looks when they ad the regular encased Lifestyle flourescents to the perimeter.

They added three rows over produce which previously had recessed spotlights:

Image

Before:
Image
From Yelp http://s3-media3.fl.yelpcdn.com/bphoto/ ... wRbQ/o.jpg

On the other side they added three more rows over bread aisle and near Deli & Bakery:

Image

Before:
Image
From Yelp http://s3-media4.fl.yelpcdn.com/bphoto/ ... Z8Xw/o.jpg

This doesn't seem to look as bad as what they did to the Tom Thumbs.

They also added more recessed fluorescent lights over the checkstands to brighten up that area.
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Re: Integration of Albertsons and Safeway

Post by architect »

kr.abs.swy wrote:I saw similar lighting "enhancements" at the Windmill store in Henderson, Nevada, this week. Just like in your pictures, they had bolted bare fluorescent strips on to the end of the Lifestyle lights at some places, had added a row of fluorescent strips across the rear perimeter, had added fluorescent strips in produce, and had added a bunch of fluorescent strips in the liquor area.

They were still doing the work, so most of the new lighting wasn't on, but it looked absolutely hideous. Bolting the cheapest fixtures they could possibly find onto the Lifestyle strips looks ridiculous.

The people on this board tend to notice things that 90% to 95% of customers don't notice ... I get that most customers are just happy if the store has what is on their list, at a reasonable price, and they don't have to wait in line ... but the new lights give the store such a low-rent feel that I can't imagine that some customers aren't going to notice. It just feels like someone said "we need to double the lighting in here for the cheapest possible price, and I don't care how it looks as long as this place glows like the sun." It wouldn't be such a big deal if there weren't higher-end fixtures throughout the store, but mixing the Lifestyle fixtures and the cheap new fixtures makes for an awful downgrade.

They were also making some changes to the meat display case and the service meat counter was closed for the day.
Interestingly, could this be a sign that the Vons locations in Vegas are being served by the SW division? Photos of a Pavillions in Hollywood were posted earlier in this thread in which the perimeter lighting was actually replaced with the typical Safeway lifestyle fluorescents, rather than the junk fixtures seen across most other divisions. If the Vons in Vegas were being served out of SoCal, it seems like they would be receiving the traditional Safeway fixtures too. So far, stores in Arizona, Texas (both Randalls and Tom Thumb) and now Nevada have received the cheap fixtures.

The sad part about these remodels is the fact that Albertsons could easily give these stores a legitimate upgrade and a new identity by just using better fixtures, which likely wouldn't cost much more considering the quantities which they would be ordering at. In Texas, the "New-Generation" Randalls/Tom Thumb locations (which typically feature warehouse ceilings in the perimeter, and hanging lights as a result) that have received these new lighting jobs look better than ever, and easily parallel the interior quality of any new-build Kroger or HEB down the street.
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Re: Integration of Albertsons and Safeway

Post by rwsandiego »

architect wrote:
kr.abs.swy wrote:I saw similar lighting "enhancements" at the Windmill store in Henderson, Nevada, this week. Just like in your pictures, they had bolted bare fluorescent strips on to the end of the Lifestyle lights at some places, had added a row of fluorescent strips across the rear perimeter, had added fluorescent strips in produce, and had added a bunch of fluorescent strips in the liquor area.

They were still doing the work, so most of the new lighting wasn't on, but it looked absolutely hideous. Bolting the cheapest fixtures they could possibly find onto the Lifestyle strips looks ridiculous.

The people on this board tend to notice things that 90% to 95% of customers don't notice ... I get that most customers are just happy if the store has what is on their list, at a reasonable price, and they don't have to wait in line ... but the new lights give the store such a low-rent feel that I can't imagine that some customers aren't going to notice. It just feels like someone said "we need to double the lighting in here for the cheapest possible price, and I don't care how it looks as long as this place glows like the sun." It wouldn't be such a big deal if there weren't higher-end fixtures throughout the store, but mixing the Lifestyle fixtures and the cheap new fixtures makes for an awful downgrade.

They were also making some changes to the meat display case and the service meat counter was closed for the day.
Interestingly, could this be a sign that the Vons locations in Vegas are being served by the SW division? Photos of a Pavillions in Hollywood were posted earlier in this thread in which the perimeter lighting was actually replaced with the typical Safeway lifestyle fluorescents, rather than the junk fixtures seen across most other divisions. If the Vons in Vegas were being served out of SoCal, it seems like they would be receiving the traditional Safeway fixtures too. So far, stores in Arizona, Texas (both Randalls and Tom Thumb) and now Nevada have received the cheap fixtures.

The sad part about these remodels is the fact that Albertsons could easily give these stores a legitimate upgrade and a new identity by just using better fixtures, which likely wouldn't cost much more considering the quantities which they would be ordering at. In Texas, the "New-Generation" Randalls/Tom Thumb locations (which typically feature warehouse ceilings in the perimeter, and hanging lights as a result) that have received these new lighting jobs look better than ever, and easily parallel the interior quality of any new-build Kroger or HEB down the street.
The choice of lighting fixtures tells me that one of three things is happening:

1. The stores will be remodeled sometime soon, but Albertsons wants to improve the lighting and this is an interim solution
2. The stores will receive a complete lighting upgrade at some point and this is an interim solution
3. Albertsons doesn't care what the lighting looks like


My guess is either 1 or 2. That said, someone else put it quite well: The customers don't care about the lighting fixtures they simply care that they don't need to bring a lantern with them when they go shopping.

I did notice that one of the VONS->Haggen->VONS stores was much brighter than in the past. Even Safeway was getting tired of the dark stores. The rebuilt Mission Hills San Diego store is a Lifestyle v 2 store, but opened with nice, bright lights. The Sports Arena Lifestyle store was very dim and recently received brighter lights. I did not notice what the fixtures looked like, though.
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