Kroger to merge with Albertsons?
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Re: Kroger to merge with Albertsons?
I have read in entirety the release containing the details of stores, warehouses, useless banners, and useless private labels being supposedly sold to C&S.
Although I have many comments I will just say an image of a full toilet is most appropriate to demonstrate my reaction.
Although I have many comments I will just say an image of a full toilet is most appropriate to demonstrate my reaction.
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Re: Kroger to merge with Albertsons?
Interestingly enough, this story is not getting much, if any coverage. To go with your theme, it's pretty obvious that it was timed to be a news "dump" as there's no reason it had to be announced on KR earnings day. So they announce it on a day nobody's going to pay attention (corporate PR departments know to always announce your bad news on a Friday), and furthermore a day where any reporters with interest in the grocery industry are going to be focused on Kroger earnings. They deliberately made it a sideshow hoping nobody would notice the story.storewanderer wrote: ↑September 8th, 2023, 12:03 pm I have read in entirety the release containing the details of stores, warehouses, useless banners, and useless private labels being supposedly sold to C&S.
Although I have many comments I will just say an image of a full toilet is most appropriate to demonstrate my reaction.
Haggen had 18 stores, C&S only has 12. They have acknowledged that this deal, just like the main deal, is subject to FTC approval. I can't wait to hear them explain how this isn't repeating the same Haggen screwup that the FTC wants to avoid. I'm betting that they're going to somehow try to illustrate that it's recreating the LLC which they'll try to call a success story although we know that was resolved pretty much in reverse. This one won't go the same way.
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Re: Kroger to merge with Albertsons?
I thought Loblaws or Sobeys would be a more likely buyer for Albertsons divests compared to C&S. Those buyers would be better than C&S (even Sobeys, who has screwed up with its purchase of Canada Safeway) in the long run.storewanderer wrote: ↑September 8th, 2023, 12:03 pm I have read in entirety the release containing the details of stores, warehouses, useless banners, and useless private labels being supposedly sold to C&S.
Although I have many comments I will just say an image of a full toilet is most appropriate to demonstrate my reaction.
We’re screwed with this deal, honestly. C&S is the successor to Fleming, who has failed to operate its own retail stores.
I’m honestly worried that this merger will still go through.
I like how states like Minnesota aren’t affected by this huge mess.
Your comments are probably the best way to describe this move.
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Re: Kroger to merge with Albertsons?
There was no chance of a Canadian purchase. The FX headwinds coupled with high interest rates in the US would render such a deal unprofitable unless they were to raise the prices 30% across the board. The few Canadian retailers I can think of that have come over recently are apparel (Canada Goose and one I forgot that already closed). They were charging the same amount in American dollars that they charge in Canadian across the border. Hence the fact that if you buy a Canada Goose jacket in the US you're probably paying more than if you flew into Vancouver and purchased it. Usually something that costs 70¢in the US is $1 Canadian; the exchange rate is closer but the added interchange costs and logistical complications add to the price as well. I do find it interesting that Loblaw is working to bring T&T into the US, but since the majority of that store product is sourced direct from Asia they can basically operate it like a separate company making their own deals through their LA headquarters; we unfortunately won't get any nice President's Choice product from Canada even if they open T&T all across the country.retailfanmitchell019 wrote: ↑September 8th, 2023, 2:11 pmI thought Loblaws or Sobeys would be a more likely buyer for Albertsons divests compared to C&S. Those buyers would be better than C&S (even Sobeys, who has screwed up with its purchase of Canada Safeway) in the long run.storewanderer wrote: ↑September 8th, 2023, 12:03 pm I have read in entirety the release containing the details of stores, warehouses, useless banners, and useless private labels being supposedly sold to C&S.
Although I have many comments I will just say an image of a full toilet is most appropriate to demonstrate my reaction.
We’re screwed with this deal, honestly. C&S is the successor to Fleming, who has failed to operate its own retail stores.
I’m honestly worried that this merger will still go through.
I like how states like Minnesota aren’t affected by this huge mess.
Your comments are probably the best way to describe this move.
I am concerned as well that C&S effectively has the right to acquire all the remaining stores that could be ordered to be sold, but the fact that they broke it into a separate possible second transaction means that they could refuse (or already be out of money) thus opening the door to Save Mart or others. The wave 2 stores will undoubtedly be much better stores than the wave 1 and thus command a higher price per store... Obviously because they're stores that they are trying to keep and thus should have better facilities, higher volumes, better profits and so forth. They clearly have decided they're going to go to war over California overlaps because of the very small number of divests. 60 something is so small that any of us could easily just go onto Google maps and make a list of divested stores that will be 95% accurate using impartiality and common sense. I'd guess the entire California list is only immediate store overlaps at the same intersection or within one or two blocks from each other at the most.
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Re: Kroger to merge with Albertsons?
Question is, what else did Haggen have? Don't forget that C&S is primarily doing wholesale (to a good number of stores in some places), so it's a bigger company than "just 12 stores".ClownLoach wrote: ↑September 8th, 2023, 12:25 pm Haggen had 18 stores, C&S only has 12. They have acknowledged that this deal, just like the main deal, is subject to FTC approval. I can't wait to hear them explain how this isn't repeating the same Haggen screwup that the FTC wants to avoid. I'm betting that they're going to somehow try to illustrate that it's recreating the LLC which they'll try to call a success story although we know that was resolved pretty much in reverse. This one won't go the same way.
Also remember that they handled taking over 180+ Grand Union stores (even though they sold off many fairly quickly to others, often chains that they already did wholesale for, so the stores remained operating and someone else took that work on, while C&S kept the wholesale business they had been getting when they were GU - not all of them worked that way, but many did), so that is also a potential option that the last company may not have had.
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Re: Kroger to merge with Albertsons?
I think the real problem is, there a lot less competitors to choose from to sell stores off to this time around vs. back when they acquired what was left of Grand Union. History shows that C&S really doesn't like being an operator and despite the handful of Piggly Wiggly's and Grand Union stores they operate today (many of which in very small towns with not much other competition), they seem to be just mediocre stores at best. Acquiring 413, and maybe more, stores is a lot to handle, especially with the kinds of generally higher volume stores the Albertsons/Safeway banners are.BillyGr wrote: ↑September 8th, 2023, 5:30 pm
Question is, what else did Haggen have? Don't forget that C&S is primarily doing wholesale (to a good number of stores in some places), so it's a bigger company than "just 12 stores".
Also remember that they handled taking over 180+ Grand Union stores (even though they sold off many fairly quickly to others, often chains that they already did wholesale for, so the stores remained operating and someone else took that work on, while C&S kept the wholesale business they had been getting when they were GU - not all of them worked that way, but many did), so that is also a potential option that the last company may not have had.
Hey, maybe they can spin some off to SuperValu and they can become an operator once again
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Re: Kroger to merge with Albertsons?
i wonder if kroger is going to spin off foodsco & illinois F4L to C&S and socal F4L to save mart with save mart rebranding them to foodmaxx and get out of the warehouse supermarket business.
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Re: Kroger to merge with Albertsons?
I completely agree. If this is allowed it will be a dumpster fire. What's interesting is they specifically mention the "banners" they will be selling off like Carrs, but don't mention the one's they will be keeping. It's also interesting that they mentioned some of the stores being divested in some areas might be Kroger stores. Kroger already operates stores under multi banners. I think it would be foolish to say for example, of the 66 stores they include in Southern CA sale to C&S that they are only allowed to use the Albertsons banner. Albertsons has a terrible reputation in LA County while they have a better reputation in Orange County. Denver is a no brainer....they aren't going to convert any of the Albertsons store's they converted to the Safeway banner back to Albertsons banner since they obviously failed in that market. QFC being spun off makes sense, but they aren't going to convert all the remaining Safeway stores to the Albertsons banner after they've spent so much time converting existing Albertsons to Safeway. There is more to the story that hasn't come out.storewanderer wrote: ↑September 8th, 2023, 12:03 pm I have read in entirety the release containing the details of stores, warehouses, useless banners, and useless private labels being supposedly sold to C&S.
Although I have many comments I will just say an image of a full toilet is most appropriate to demonstrate my reaction.
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Re: Kroger to merge with Albertsons?
I’d disagree about the Albertsons banner having a terrible reputation in LA County. Maybe in the blue-collar areas of LA County where Albertsons was known for having bad pricing, but all of those ex-Lucky stores (many of which were in poor shape) were closed or remodeled over the years. Albertsons invested heavily in SoCal in the early/mid-2000s and gave stores nice remodels back then.Bluelightspecial wrote: ↑September 8th, 2023, 9:50 pm
Albertsons has a terrible reputation in LA County while they have a better reputation in Orange County. Denver is a no brainer....they aren't going to convert any of the Albertsons store's they converted to the Safeway banner back to Albertsons banner since they obviously failed in that market. QFC being spun off makes sense, but they aren't going to convert all the remaining Safeway stores to the Albertsons banner after they've spent so much time converting existing Albertsons to Safeway. There is more to the story that hasn't come out.
I’d argue Albertsons has higher volume stores than Vons in SoCal: their store base in SoCal is newer and larger stores than Vons, even though Vons has higher store count.
In Colorado, the remaining Albertsons stores, after 2/3 of them were closed (during the LLC era), were modern stores with interiors dating back to 2000 at the oldest. Those stores left did very strong business as Albertsons.
Albertsons Rocky Mountain Division (CO; Wyoming excluding Rock Springs/Jackson; Scottsbluff, NE; Rapid City, SD) had stores ranging in age from the late 60's to the mid 2000's. A majority of them had blue/gray. 3 or 4 stores had Awnings interior, quite a few had the Grocery Warehouse "Fiesta" interior, a handful of stores got Grocery Palace. A few stores also had the "Larry" (Broadway) interior, mostly remodel jobs. I don't think any CO stores got the Jewel interior. This division may have included the Omaha stores at one time.
This was probably the weakest division under Old Albertsons. They didn't invest in this divsion as much compared to SoCal, Jewel, or Acme, judging by the amount of stores that still had blue/gray in the late 2000's, and the amount of closures LLC did. They were #4 in share, behind King Soopers, Safeway, and Walmart in CO.
Safeway has a worse reputation in Denver: in 2013 or so, they had a lowest level of Lifestyle stores in that division. Even the Dominick’s division in Chicago (which was shut down later that year) had a higher percentage of Lifestyle stores. Their store fleet in Denver is still outdated. They have lower share than Walmart in Denver. King Soopers has a towering 33% market share in Denver. https://www.axios.com/local/denver/2023 ... share-2022#
I’d love to see Hy-Vee enter Denver. Denver would be a natural extension for Hy-Vee’s operations, as Denver has a LOT of Midwestern transplants, many of which are familiar with Hy-Vee.
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Re: Kroger to merge with Albertsons?
They have explicitly stated: #1 - no spin offs, Spinco, etc. They're now a no-spin zone period.
#2 - C&S has the first right to buy all of the remaining 231 stores that may or may not be sold.
So unless C&S doesn't take the 2nd wave of stores nobody else will be joining this deal. Furthermore, anyone acquiring 231 stores that likely will be very spread across the entire country will fail.