storewanderer wrote: ↑March 6th, 2022, 11:10 am
veteran+ wrote: ↑March 6th, 2022, 8:05 am
Wow........................
and sigh.............................
It's always the business environment and the Cali government and NOT the corporations and their leaders.
Got it
I think initially it was the decisions made by the store chains that led to the development of larger stores not happening again in the state (after the mid 90's with Smiths and late 90's with some Lucky/Sav-On combos and Ralphs Marketplaces). Basically what it comes to is after the 2008 recession and the SoCal strike period nobody was motivated in the state to do better (to the customer) with larger stores anymore. Instead they chose minimum effort. The only chains showing success at that time were Safeway and Stater both build smaller stores and never showed any interest in large format so they kept building little 45k-55k square foot stores. Albertsons under Supervalu had imploded and wasn't developing anything anymore and Save Mart's new builds were in that 55k square foot range historically too and even that stopped after they bought Albertsons NorCal.
But looking at right now- in 2022- why is nobody building new large 80k square foot grocery stores in California? I put that solely on the above analysis- the business environment has been made difficult for outside entities to enter without very time consuming activities and significant expenses. Whether or not you want to place the blame on the politicians for that, the groups (which in some cases have been the retailers themselves, but in most cases it is activist groups) who have lobbied the politicians to make laws that essentially turn CA into a closed market due to various "differences" on product labeling, sourcing, etc. from other states, or the theory "there is already a lot of other competition in the state and it just wouldn't make sense" or the theory "CA shoppers do not like big stores (I disagree with this- every Wal Mart, Costco, Target and WinCo in the state is jam packed with shoppers)- the net result is the same. Inferior undersized and overpriced grocery stores compared to much of the US.
I really think that we all underestimate the dominance of Costco on the West Coast. It is well known that Costco store volumes on the West Coast are 50% higher than chain average.
They have 828 stores and are now up to $192 Billion a year. All of Kroger does $137 B across 2800 stores.
The average Costco does $231 Million dollars now. Back to the West Coast discussion - if they do 50% more that puts the average West Coast Costco at almost $350 Million a year.
The average Kroger is doing $48 Million, and I would expect a California Ralphs to less due to the reduced store capacity. There is no way they can do the same $48 M here when I see the average Fred Meyer on a random weekday in Washington state has 30 checkstands open and staffed with lines. I have read before in the news that Ralphs on average in California does only around $20M per store, and that's more than Albertsons/Vons average here.
If I compare average West Coast Costco to average chain wide Kroger - that means every Costco takes the equivalent of 7.2 Kroger stores off the market. And I do not believe that the majority of their business is businesses anymore - at least not in mainline stores. So if you want to factor out the business, TV and tire sales that's fine but you're probably still comparing against double what Ralphs/Vons/Albertsons actually does in an average West Coast store. The 7.2 grocery stores removed per Costco probably holds up against that or worse.
If the average California Ralphs unit is only about $20M a year - that would mean the average Costco is doing the same sales as 17 Ralphs. Incredible.
The $350 Million per Costco figure seems very real as I know the one by my house does nearly $2 Million dollars every Saturday year round. And they have 5 other stores within a 7 mile radius of which I would say three are significantly busier! They said they did over $10M Black Friday weekend and I believe it.
Their Torrance, CA store is on its 3rd building in the last 20 years as it has outgrown its walls twice despite being next door to a Sam's Club. I would not be the least bit surprised if their new store was a $500M store - and it still doesn't do as much as Hawthorne off Rosecrans or the original Price Club in San Diego in the old Howard Hughes airplane factory on Morena. Out of state I visited Tukwila after hearing it was a combo Costco and Costco business center. I was astonished by the traffic. I arrived ten minutes before a weekday morning opening and at least 500 cars arrived in that time window. (I do have experience with car counting as I've scouted real estate locations, if anything that is an under count).
Costco has 131 stores in California now. Ralphs is down to what, 150?
Costco has 32 stores in Washington and 13 in Oregon.
Take a guess how many Costco stores are in Texas - where Walmart, H-E-B and numerous other brands thrive still? Only 35 stores. California has nearly 4 Costco stores for every Texas one. CA population 39M, Texas 29M.
Costco absolutely slaughters the grocery store competition here, and they are only becoming more dominant every single year. If anyone in California especially can't figure out why they are dying in the grocery store business all they need to do is reach around and pull the knife out of their back. The prints will be from the local Costco store manager.