Albertsons announces strategic review of company

[storewanderer]

I think a Whole Foods purchase would cause some serious anti-trust issues. Would the FTC play ball with Albertsons again after what happened with Haggen and just let them get whatever they want basically?

What about Sprouts... I feel like there is overlap there too but Sprouts sales volumes and overall market share may be low enough that it would not matter as much. I think there is more of an opportunity to improve performance in a way where Albertsons would be effective at Sprouts, than at Whole Foods. I am not really sure Albertsons would know how to "fix" Whole Foods (I am afraid they'd just increase the prices and bring in lower quality Safeway perimeter programs since Safeway's pricing is already higher than Whole Foods across the west coast on identical items). I'm not even sure I'd know how to "fix" Whole Foods. Best scenario for Whole Foods is for John Mackey to gain full control over things again under private ownership and do what he sees fit; I am confident he would know how to fix it.

Plus there is going to be the union vs. non union issue. A big reason why Albertsons got away with what it did involving Haggen was due to the union- first the union pushed to sell to a unionized operator so along came Haggen who agreed to play along. Then when Haggen went bust and stores went up for auction suddenly it was to try and get a union operator back to as many stores as possible and the only interested union operator was in many cases Albertsons...

I don't hold much hope on Albertsons and upscale formats. The Market Street in Boise/Meridian is excellent but no expansion of the concept has taken place. I am not sure most of Safeway is really capable of executing that type of store anyway.

[pseudo3d]

I think a Whole Foods purchase would cause some serious anti-trust issues. Would the FTC play ball with Albertsons again after what happened with Haggen and just let them get whatever they want basically?

What about Sprouts... I feel like there is overlap there too but Sprouts sales volumes and overall market share may be low enough that it would not matter as much. I think there is more of an opportunity to improve performance in a way where Albertsons would be effective at Sprouts, than at Whole Foods. I am not really sure Albertsons would know how to "fix" Whole Foods (I am afraid they'd just increase the prices and bring in lower quality Safeway perimeter programs since Safeway's pricing is already higher than Whole Foods across the west coast on identical items). I'm not even sure I'd know how to "fix" Whole Foods. Best scenario for Whole Foods is for John Mackey to gain full control over things again under private ownership and do what he sees fit; I am confident he would know how to fix it.

Plus there is going to be the union vs. non union issue. A big reason why Albertsons got away with what it did involving Haggen was due to the union- first the union pushed to sell to a unionized operator so along came Haggen who agreed to play along. Then when Haggen went bust and stores went up for auction suddenly it was to try and get a union operator back to as many stores as possible and the only interested union operator was in many cases Albertsons...

I don't hold much hope on Albertsons and upscale formats. The Market Street in Boise/Meridian is excellent but no expansion of the concept has taken place. I am not sure most of Safeway is really capable of executing that type of store anyway.

The FTC will rubber-stamp just about everything these days. They wouldn't have any problems with Whole Foods or if Albertsons decided to dump the entire Texas stock to H-E-B.

Mostly the problem with WFM is it's a very different operation that's not easy to integrate with their core markets and not only in cities where Albertsons has no existing presence, but it includes international stores. But then again, Amazon has also segregated Amazon Fresh and WFM, which makes a bit less sense since Amazon Fresh's stores are largely concentrated around the same urban markets where WFM has been for years (and, by extension, Albertsons). Meanwhile, Amazon also bought (though I can't tell if the deal was closed) about 15% of SpartanNash, which won't be integrated with Amazon's operations anytime soon.

The union issue for WFM vs. the other banners is a non-issue unless they wanted to start flipping banners, which is probably why the Safeway/Albertsons conversion has been much slower in the Southwest Division. (From what I've read and seen, this is a sticky issue that dictates if stores change names or not).

I think the whole "underpeforming banners closed or sold" is a wrong guess, mostly for a couple of reasons. Most of these analysts have been consistently wrong, like talking about selling off Safeway for real estate (well, that has happened to some extent, but they were talking about talking about selling off the stores entirely). Secondly, what is there to sell? The Texas division, particularly the Randalls stores, comes to mind, but those aren't going to net a lot of money since H-E-B, which dominates those markets, owns pretty much what they want to own. The only way that it might make work is if H-E-B buys all ~200 stores in Texas (the number was 209 as of February 2021, so 200 accounts for store closures and minus the El Paso division), PLUS the stores in Louisiana, which are attached to that division (only 16). The number of H-E-B stores is around 400, including 50 Mexican stores. It's way too big for H-E-B to swallow, considering that they only bought maybe a dozen stores from Albertsons (Austin, College Station, Kerrville, New Braunfels), all in markets that they had, and were forced by contract to pick up other stores that were kept dark. The Dallas stores (also kept dark) were mostly the ones that they had gotten through Minyard Sun Fresh Market, which wasn't through Albertsons directly. Even Publix (much larger than H-E-B in store count), which got (over the years), less than 70 Albertsons at most.

The only other option besides H-E-B (and we all know Kroger won't be taking the bait) is selling it off in chunks. Sure, there might be locations that Kroger, independents, or H-E-B will want, but there just aren't enough independents and competitors to go around anymore. And you know that some of the really desolate United Supermarkets stores that they picked up from Lawrence Bros. won't fetch much cash.

As for "Albertsons Market Street", there probably hasn't been much expansion of the format partially because it opened a few years before COVID-19, which really changed a lot about fresh departments operated, and because the format heavily relies on fresh departments instead of just using the space for "stuff" (a la Kroger Marketplace stores), it hasn't seen much activity. If it was losing money hand over fist I'm sure we'd hear of it by now.

[storewanderer]

The FTC will rubber-stamp just about everything these days. They wouldn't have any problems with Whole Foods or if Albertsons decided to dump the entire Texas stock to H-E-B.

Mostly the problem with WFM is it's a very different operation that's not easy to integrate with their core markets and not only in cities where Albertsons has no existing presence, but it includes international stores. But then again, Amazon has also segregated Amazon Fresh and WFM, which makes a bit less sense since Amazon Fresh's stores are largely concentrated around the same urban markets where WFM has been for years (and, by extension, Albertsons). Meanwhile, Amazon also bought (though I can't tell if the deal was closed) about 15% of SpartanNash, which won't be integrated with Amazon's operations anytime soon.

The union issue for WFM vs. the other banners is a non-issue unless they wanted to start flipping banners, which is probably why the Safeway/Albertsons conversion has been much slower in the Southwest Division. (From what I've read and seen, this is a sticky issue that dictates if stores change names or not).

I think the whole "underpeforming banners closed or sold" is a wrong guess, mostly for a couple of reasons. Most of these analysts have been consistently wrong, like talking about selling off Safeway for real estate (well, that has happened to some extent, but they were talking about talking about selling off the stores entirely). Secondly, what is there to sell? The Texas division, particularly the Randalls stores, comes to mind, but those aren't going to net a lot of money since H-E-B, which dominates those markets, owns pretty much what they want to own. The only way that it might make work is if H-E-B buys all ~200 stores in Texas (the number was 209 as of February 2021, so 200 accounts for store closures and minus the El Paso division), PLUS the stores in Louisiana, which are attached to that division (only 16). The number of H-E-B stores is around 400, including 50 Mexican stores. It's way too big for H-E-B to swallow, considering that they only bought maybe a dozen stores from Albertsons (Austin, College Station, Kerrville, New Braunfels), all in markets that they had, and were forced by contract to pick up other stores that were kept dark. The Dallas stores (also kept dark) were mostly the ones that they had gotten through Minyard Sun Fresh Market, which wasn't through Albertsons directly. Even Publix (much larger than H-E-B in store count), which got (over the years), less than 70 Albertsons at most.

The only other option besides H-E-B (and we all know Kroger won't be taking the bait) is selling it off in chunks. Sure, there might be locations that Kroger, independents, or H-E-B will want, but there just aren't enough independents and competitors to go around anymore. And you know that some of the really desolate United Supermarkets stores that they picked up from Lawrence Bros. won't fetch much cash.

As for "Albertsons Market Street", there probably hasn't been much expansion of the format partially because it opened a few years before COVID-19, which really changed a lot about fresh departments operated, and because the format heavily relies on fresh departments instead of just using the space for "stuff" (a la Kroger Marketplace stores), it hasn't seen much activity. If it was losing money hand over fist I'm sure we'd hear of it by now.

Looking at how HEB handled the purchase of some of that Minyard real estate when they failed with the merger divests in Texas, I don't see them taking 200 stores from Albertsons/United.

Publix took how many years to digest all of those Albertsons Stores...? It almost felt like Publix was dictating the terms of the Albertsons exit from Florida over the years (who knows, maybe they were). Sort of like Albertsons said we want to get out of this market in 2005 and Publix said okay, let's work out a plan to make this take 15 years. Not sure what the Safeway banner in Florida was all about but it was all for not and very costly to run/supply the way they were running it (constant ads full of loss leaders, $10 off $50 coupons, etc.).

I've tried to come across more about just how many stores Kroger got from Albertsons but I can never complete the project. But from what I can tell Kroger did get a number of stores from Albertsons in TX/LA/some other states where Albertsons never should have ventured like AL. I think there are some in NE and there is definitely one in Wichita. Move over to Utah and you have the random Smiths in Magna that was built as an Albertsons.

The thing with these underperforming divisions (if there even are any) is the company, depending on the degree of underperformance, may just decide they want them gone. It isn't about trying to find a single bidder, it isn't about the employees, it is about exiting the underperforming asset. Just like how Safeway closed down Genuardis and Dominicks.

[pseudo3d]

The FTC will rubber-stamp just about everything these days. They wouldn't have any problems with Whole Foods or if Albertsons decided to dump the entire Texas stock to H-E-B.

Mostly the problem with WFM is it's a very different operation that's not easy to integrate with their core markets and not only in cities where Albertsons has no existing presence, but it includes international stores. But then again, Amazon has also segregated Amazon Fresh and WFM, which makes a bit less sense since Amazon Fresh's stores are largely concentrated around the same urban markets where WFM has been for years (and, by extension, Albertsons). Meanwhile, Amazon also bought (though I can't tell if the deal was closed) about 15% of SpartanNash, which won't be integrated with Amazon's operations anytime soon.

The union issue for WFM vs. the other banners is a non-issue unless they wanted to start flipping banners, which is probably why the Safeway/Albertsons conversion has been much slower in the Southwest Division. (From what I've read and seen, this is a sticky issue that dictates if stores change names or not).

I think the whole "underpeforming banners closed or sold" is a wrong guess, mostly for a couple of reasons. Most of these analysts have been consistently wrong, like talking about selling off Safeway for real estate (well, that has happened to some extent, but they were talking about talking about selling off the stores entirely). Secondly, what is there to sell? The Texas division, particularly the Randalls stores, comes to mind, but those aren't going to net a lot of money since H-E-B, which dominates those markets, owns pretty much what they want to own. The only way that it might make work is if H-E-B buys all ~200 stores in Texas (the number was 209 as of February 2021, so 200 accounts for store closures and minus the El Paso division), PLUS the stores in Louisiana, which are attached to that division (only 16). The number of H-E-B stores is around 400, including 50 Mexican stores. It's way too big for H-E-B to swallow, considering that they only bought maybe a dozen stores from Albertsons (Austin, College Station, Kerrville, New Braunfels), all in markets that they had, and were forced by contract to pick up other stores that were kept dark. The Dallas stores (also kept dark) were mostly the ones that they had gotten through Minyard Sun Fresh Market, which wasn't through Albertsons directly. Even Publix (much larger than H-E-B in store count), which got (over the years), less than 70 Albertsons at most.

The only other option besides H-E-B (and we all know Kroger won't be taking the bait) is selling it off in chunks. Sure, there might be locations that Kroger, independents, or H-E-B will want, but there just aren't enough independents and competitors to go around anymore. And you know that some of the really desolate United Supermarkets stores that they picked up from Lawrence Bros. won't fetch much cash.

As for "Albertsons Market Street", there probably hasn't been much expansion of the format partially because it opened a few years before COVID-19, which really changed a lot about fresh departments operated, and because the format heavily relies on fresh departments instead of just using the space for "stuff" (a la Kroger Marketplace stores), it hasn't seen much activity. If it was losing money hand over fist I'm sure we'd hear of it by now.

Looking at how HEB handled the purchase of some of that Minyard real estate when they failed with the merger divests in Texas, I don't see them taking 200 stores from Albertsons/United.

Publix took how many years to digest all of those Albertsons Stores...? It almost felt like Publix was dictating the terms of the Albertsons exit from Florida over the years (who knows, maybe they were). Sort of like Albertsons said we want to get out of this market in 2005 and Publix said okay, let's work out a plan to make this take 15 years. Not sure what the Safeway banner in Florida was all about but it was all for not and very costly to run/supply the way they were running it (constant ads full of loss leaders, $10 off $50 coupons, etc.).

I've tried to come across more about just how many stores Kroger got from Albertsons but I can never complete the project. But from what I can tell Kroger did get a number of stores from Albertsons in TX/LA/some other states where Albertsons never should have ventured like AL. I think there are some in NE and there is definitely one in Wichita. Move over to Utah and you have the random Smiths in Magna that was built as an Albertsons.

The thing with these underperforming divisions (if there even are any) is the company, depending on the degree of underperformance, may just decide they want them gone. It isn't about trying to find a single bidder, it isn't about the employees, it is about exiting the underperforming asset. Just like how Safeway closed down Genuardis and Dominicks.

Genuardi’s sale happened slowly. It was never an independent division and always part of Safeway's Eastern Division. First, in 2010, they didn’t renew a few leases, then they announced specifically in 2011 they would sell all or part of the stores, then they sold stores over the next few years to competitors, specifically Giant-PA, which bought and reopened 15 of them (Weis also bought three). By 2015, they still had Audubon open (closed by May) and the lease for Barnegat (which later reopened as ACME).

For Dominick’s, by the time the sale was announced, it wasn’t entirely known if they wanted to sell off the division wholesale or not. By that time, it was clear that the company was in significant trouble, and it too was sold off to competitors, including Jewel-Osco, Mariano’s, and independents.

Going back further to Albertsons’ sales, the 2002 sales signified an end to rapid expansion and many of the division sales were new or recently acquired stores, which did have some value in selling them off. The Houston stores were all relatively new, and those were sold to Kroger, Randalls, and others. The Mid-South stores was composed of acquisitions from Bruno’s (both regular Bruno’s stores and the Seessel’s stores), and were sold to Publix or Schnucks. The odd man out was the San Antonio Division, which had stores dating back to the Skaggs-Albertsons days, and had no big store sales. Even with that, it still held onto stores in New Braunfels, Kerrville, and the Austin area. (Likewise, Houston’s sale had spared Bryan-College Station and most of Louisiana, even New Orleans).

Even when the Florida stores were being renovated into Safeway, it only set the clock ticking on what would be the long-range plan of them were. If they had managed to acquire more Florida stores (possibly looking at SEG as a whole, who knows) or hammered out a third-party distribution deal with C&S, SuperValu, or GFS, then maybe they would've been kept. But a year came and passed without any news, and as a result, those stores were doomed.

Right now, despite the stream of discouraging news coming from problem divisions like Denver, South, and Mid-Atlantic, none of them are in imminent danger of being hacked apart. It is all speculation at this point. Furthermore, as others have pointed out here, trying to peel off divisions (especially a hack-and-slash that will remove wholesale divisions from the books) is not a winning strategy long-term. Besides Safeway's fate from trying to do that to Genuardi's and Dominick's, fast forward five years from 2002…where was Albertsons? In two companies! Between SuperValu and LLC, it had bought Shaw’s/Star Market but they had, by this time, pulled out of Austin, New Orleans, NorCal, Milwaukee, and Oklahoma, with even more stores across all divisions shed. (Not to mention the entire drug store empire being gone).

[ClownLoach]

I think a Whole Foods purchase would cause some serious anti-trust issues. Would the FTC play ball with Albertsons again after what happened with Haggen and just let them get whatever they want basically?

What about Sprouts... I feel like there is overlap there too but Sprouts sales volumes and overall market share may be low enough that it would not matter as much. I think there is more of an opportunity to improve performance in a way where Albertsons would be effective at Sprouts, than at Whole Foods. I am not really sure Albertsons would know how to "fix" Whole Foods (I am afraid they'd just increase the prices and bring in lower quality Safeway perimeter programs since Safeway's pricing is already higher than Whole Foods across the west coast on identical items). I'm not even sure I'd know how to "fix" Whole Foods. Best scenario for Whole Foods is for John Mackey to gain full control over things again under private ownership and do what he sees fit; I am confident he would know how to fix it.

Plus there is going to be the union vs. non union issue. A big reason why Albertsons got away with what it did involving Haggen was due to the union- first the union pushed to sell to a unionized operator so along came Haggen who agreed to play along. Then when Haggen went bust and stores went up for auction suddenly it was to try and get a union operator back to as many stores as possible and the only interested union operator was in many cases Albertsons...

I don't hold much hope on Albertsons and upscale formats. The Market Street in Boise/Meridian is excellent but no expansion of the concept has taken place. I am not sure most of Safeway is really capable of executing that type of store anyway.

They will play both sides of the coin. They'll tell the FTC it is adding a different type of company to the umbrella and it's an apples to oranges comparison between the two brands with zero overlap. Then they'll tell Wall Street that there are tremendous synergies from integrating distributon centers, increased buying power, consolidation of support center redundancy.

[HCal]

The FTC has become a joke. Since there is one vacancy, it means that at least one of the 2 Republicans would have to join the 2 Democrats in order to do anything.

If Albertsons wanted to buy Whole Foods, I'm guessing the FTC would ask them to divest around 20-30 stores in mid-size metros. They could easily find local operators to run those, especially if they divest Albertsons/Safeway locations.

[storewanderer]

The FTC has become a joke. Since there is one vacancy, it means that at least one of the 2 Republicans would have to join the 2 Democrats in order to do anything.

If Albertsons wanted to buy Whole Foods, I'm guessing the FTC would ask them to divest around 20-30 stores in mid-size metros. They could easily find local operators to run those, especially if they divest Albertsons/Safeway locations.

San Francisco city would be a place that would require a lot of divest activity. It would be interesting to see how that played out, as in, would they keep the Whole Foods or the Safeway.

Up in OR/WA I think Whole Foods generally underperforms some local chains and I could see them being happy to get rid of some of those Whole Foods units if they had to, but there might be enough competition up there that they wouldn't have to divest anything.

I think Albertsons is a terrible fit for Whole Foods. But it may be a good fit for Sprouts...

[ClownLoach]

The FTC has become a joke. Since there is one vacancy, it means that at least one of the 2 Republicans would have to join the 2 Democrats in order to do anything.

If Albertsons wanted to buy Whole Foods, I'm guessing the FTC would ask them to divest around 20-30 stores in mid-size metros. They could easily find local operators to run those, especially if they divest Albertsons/Safeway locations.

San Francisco city would be a place that would require a lot of divest activity. It would be interesting to see how that played out, as in, would they keep the Whole Foods or the Safeway.

Up in OR/WA I think Whole Foods generally underperforms some local chains and I could see them being happy to get rid of some of those Whole Foods units if they had to, but there might be enough competition up there that they wouldn't have to divest anything.

I think Albertsons is a terrible fit for Whole Foods. But it may be a good fit for Sprouts...

They only require divestiture when the industry type is identical. They will separate a health food store from a conventional grocer. It's the same reason that they haven't said one word about Smart & Final merging with parent of El Super even though they literally have stores that share a wall. Apples and oranges.

The FTC is not a very big deal. They look at things through a very narrow scope. Also they look away in threat of closure. Amazon will argue the entire unit is failing and if they do not allow the sale as a whole (so Amazon doesn't eat any closure expenses) that they will liquidate as they cannot tolerate declining businesses. I expect they will announce all of this and immediately reclassify WFM as a discontinued business unit to ensure that a sale goes through.

[architect]

The FTC will rubber-stamp just about everything these days. They wouldn't have any problems with Whole Foods or if Albertsons decided to dump the entire Texas stock to H-E-B.

Mostly the problem with WFM is it's a very different operation that's not easy to integrate with their core markets and not only in cities where Albertsons has no existing presence, but it includes international stores. But then again, Amazon has also segregated Amazon Fresh and WFM, which makes a bit less sense since Amazon Fresh's stores are largely concentrated around the same urban markets where WFM has been for years (and, by extension, Albertsons). Meanwhile, Amazon also bought (though I can't tell if the deal was closed) about 15% of SpartanNash, which won't be integrated with Amazon's operations anytime soon.

The union issue for WFM vs. the other banners is a non-issue unless they wanted to start flipping banners, which is probably why the Safeway/Albertsons conversion has been much slower in the Southwest Division. (From what I've read and seen, this is a sticky issue that dictates if stores change names or not).

I think the whole "underpeforming banners closed or sold" is a wrong guess, mostly for a couple of reasons. Most of these analysts have been consistently wrong, like talking about selling off Safeway for real estate (well, that has happened to some extent, but they were talking about talking about selling off the stores entirely). Secondly, what is there to sell? The Texas division, particularly the Randalls stores, comes to mind, but those aren't going to net a lot of money since H-E-B, which dominates those markets, owns pretty much what they want to own. The only way that it might make work is if H-E-B buys all ~200 stores in Texas (the number was 209 as of February 2021, so 200 accounts for store closures and minus the El Paso division), PLUS the stores in Louisiana, which are attached to that division (only 16). The number of H-E-B stores is around 400, including 50 Mexican stores. It's way too big for H-E-B to swallow, considering that they only bought maybe a dozen stores from Albertsons (Austin, College Station, Kerrville, New Braunfels), all in markets that they had, and were forced by contract to pick up other stores that were kept dark. The Dallas stores (also kept dark) were mostly the ones that they had gotten through Minyard Sun Fresh Market, which wasn't through Albertsons directly. Even Publix (much larger than H-E-B in store count), which got (over the years), less than 70 Albertsons at most.

The only other option besides H-E-B (and we all know Kroger won't be taking the bait) is selling it off in chunks. Sure, there might be locations that Kroger, independents, or H-E-B will want, but there just aren't enough independents and competitors to go around anymore. And you know that some of the really desolate United Supermarkets stores that they picked up from Lawrence Bros. won't fetch much cash.

As for "Albertsons Market Street", there probably hasn't been much expansion of the format partially because it opened a few years before COVID-19, which really changed a lot about fresh departments operated, and because the format heavily relies on fresh departments instead of just using the space for "stuff" (a la Kroger Marketplace stores), it hasn't seen much activity. If it was losing money hand over fist I'm sure we'd hear of it by now.

Looking at how HEB handled the purchase of some of that Minyard real estate when they failed with the merger divests in Texas, I don't see them taking 200 stores from Albertsons/United.

Publix took how many years to digest all of those Albertsons Stores...? It almost felt like Publix was dictating the terms of the Albertsons exit from Florida over the years (who knows, maybe they were). Sort of like Albertsons said we want to get out of this market in 2005 and Publix said okay, let's work out a plan to make this take 15 years. Not sure what the Safeway banner in Florida was all about but it was all for not and very costly to run/supply the way they were running it (constant ads full of loss leaders, $10 off $50 coupons, etc.).

I've tried to come across more about just how many stores Kroger got from Albertsons but I can never complete the project. But from what I can tell Kroger did get a number of stores from Albertsons in TX/LA/some other states where Albertsons never should have ventured like AL. I think there are some in NE and there is definitely one in Wichita. Move over to Utah and you have the random Smiths in Magna that was built as an Albertsons.

The thing with these underperforming divisions (if there even are any) is the company, depending on the degree of underperformance, may just decide they want them gone. It isn't about trying to find a single bidder, it isn't about the employees, it is about exiting the underperforming asset. Just like how Safeway closed down Genuardis and Dominicks.

My prediction is that if HEB gets involved, it would be in buying United. In the majority of United's markets, they have the bulk of market share, which would allow HEB to scale of their operations in the north/west portions of the state very quickly while not having to absorb 200+ stores from the entirety of Albertsons' Texas operations. This would also allow them to jumpstart their DFW operation, with the caveat that several of Market Street's locations are near HEB stores currently under construction in Plano, Frisco, and McKinney. As far as the Southern division goes, I do not expect that HEB would buy the division whole, as many of the stores are simply too small when compared to HEB's typical large-market stores. However, if Albertsons decided to shut down the division and sell off stores piecemeal, I could see HEB picking up some of the larger Tom Thumb stores, primarily in more established parts of Dallas/Fort Worth where building ground-up stores could be a long-term, expensive proposition. A few Randalls properties could also be valuable for HEB, such as the Memorial/Beltway 8 and Holcombe/Buffalo Speedway stores.

Side note, if the latter scenario took place, and considering Kroger's recent announcement of expanding into Austin and San Antonio via online delivery, could there be a possibility of Kroger buying the Austin-area Randalls stores?

[pseudo3d]

The FTC will rubber-stamp just about everything these days. They wouldn't have any problems with Whole Foods or if Albertsons decided to dump the entire Texas stock to H-E-B.

Mostly the problem with WFM is it's a very different operation that's not easy to integrate with their core markets and not only in cities where Albertsons has no existing presence, but it includes international stores. But then again, Amazon has also segregated Amazon Fresh and WFM, which makes a bit less sense since Amazon Fresh's stores are largely concentrated around the same urban markets where WFM has been for years (and, by extension, Albertsons). Meanwhile, Amazon also bought (though I can't tell if the deal was closed) about 15% of SpartanNash, which won't be integrated with Amazon's operations anytime soon.

The union issue for WFM vs. the other banners is a non-issue unless they wanted to start flipping banners, which is probably why the Safeway/Albertsons conversion has been much slower in the Southwest Division. (From what I've read and seen, this is a sticky issue that dictates if stores change names or not).

I think the whole "underpeforming banners closed or sold" is a wrong guess, mostly for a couple of reasons. Most of these analysts have been consistently wrong, like talking about selling off Safeway for real estate (well, that has happened to some extent, but they were talking about talking about selling off the stores entirely). Secondly, what is there to sell? The Texas division, particularly the Randalls stores, comes to mind, but those aren't going to net a lot of money since H-E-B, which dominates those markets, owns pretty much what they want to own. The only way that it might make work is if H-E-B buys all ~200 stores in Texas (the number was 209 as of February 2021, so 200 accounts for store closures and minus the El Paso division), PLUS the stores in Louisiana, which are attached to that division (only 16). The number of H-E-B stores is around 400, including 50 Mexican stores. It's way too big for H-E-B to swallow, considering that they only bought maybe a dozen stores from Albertsons (Austin, College Station, Kerrville, New Braunfels), all in markets that they had, and were forced by contract to pick up other stores that were kept dark. The Dallas stores (also kept dark) were mostly the ones that they had gotten through Minyard Sun Fresh Market, which wasn't through Albertsons directly. Even Publix (much larger than H-E-B in store count), which got (over the years), less than 70 Albertsons at most.

The only other option besides H-E-B (and we all know Kroger won't be taking the bait) is selling it off in chunks. Sure, there might be locations that Kroger, independents, or H-E-B will want, but there just aren't enough independents and competitors to go around anymore. And you know that some of the really desolate United Supermarkets stores that they picked up from Lawrence Bros. won't fetch much cash.

As for "Albertsons Market Street", there probably hasn't been much expansion of the format partially because it opened a few years before COVID-19, which really changed a lot about fresh departments operated, and because the format heavily relies on fresh departments instead of just using the space for "stuff" (a la Kroger Marketplace stores), it hasn't seen much activity. If it was losing money hand over fist I'm sure we'd hear of it by now.

Looking at how HEB handled the purchase of some of that Minyard real estate when they failed with the merger divests in Texas, I don't see them taking 200 stores from Albertsons/United.

Publix took how many years to digest all of those Albertsons Stores...? It almost felt like Publix was dictating the terms of the Albertsons exit from Florida over the years (who knows, maybe they were). Sort of like Albertsons said we want to get out of this market in 2005 and Publix said okay, let's work out a plan to make this take 15 years. Not sure what the Safeway banner in Florida was all about but it was all for not and very costly to run/supply the way they were running it (constant ads full of loss leaders, $10 off $50 coupons, etc.).

I've tried to come across more about just how many stores Kroger got from Albertsons but I can never complete the project. But from what I can tell Kroger did get a number of stores from Albertsons in TX/LA/some other states where Albertsons never should have ventured like AL. I think there are some in NE and there is definitely one in Wichita. Move over to Utah and you have the random Smiths in Magna that was built as an Albertsons.

The thing with these underperforming divisions (if there even are any) is the company, depending on the degree of underperformance, may just decide they want them gone. It isn't about trying to find a single bidder, it isn't about the employees, it is about exiting the underperforming asset. Just like how Safeway closed down Genuardis and Dominicks.

My prediction is that if HEB gets involved, it would be in buying United. In the majority of United's markets, they have the bulk of market share, which would allow HEB to scale of their operations in the north/west portions of the state very quickly while not having to absorb 200+ stores from the entirety of Albertsons' Texas operations. This would also allow them to jumpstart their DFW operation, with the caveat that several of Market Street's locations are near HEB stores currently under construction in Plano, Frisco, and McKinney. As far as the Southern division goes, I do not expect that HEB would buy the division whole, as many of the stores are simply too small when compared to HEB's typical large-market stores. However, if Albertsons decided to shut down the division and sell off stores piecemeal, I could see HEB picking up some of the larger Tom Thumb stores, primarily in more established parts of Dallas/Fort Worth where building ground-up stores could be a long-term, expensive proposition. A few Randalls properties could also be valuable for HEB, such as the Memorial/Beltway 8 and Holcombe/Buffalo Speedway stores.

Side note, if the latter scenario took place, and considering Kroger's recent announcement of expanding into Austin and San Antonio via online delivery, could there be a possibility of Kroger buying the Austin-area Randalls stores?

A lot of the United stores are small too. I think their "largest" (regular) United Supermarkets store opened last year, and that's just around 63k square feet. Most of their stores are around that size (particularly ones they took over from Albertsons) or smaller, like the Lawrence Bros. stores. And with H-E-B already making their moves in D-FW and Lubbock, the importance of United as an acquisition target by H-E-B is not as big as it is as it was a decade ago or so when Albertsons first bought it.

I don't know the numbers of the Southern Division, but if they wanted it off the books the numbers of the stores, especially in Houston and Austin, are few enough that they can continue to whittle away the stores without scaring investors by bumping off the whole division.

And besides, the other thing to keep in mind is that Amazon's purchase of WFM was what really spooked Albertsons into "investing in technology" or whatever, and with this unstoppable Amazon grocery juggernaut not happening--the Amazon Fresh stores and Amazon Go stores a fraction of what was initially predicted (by Amazon and by analysts), and not particularly well-run either, maybe the strategic review is to pump the brakes on Sankaran's tech investments and actually focus on cultivating the stores, which have somewhat fallen into disrepair. One can only hope.