The present and future of Randalls

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Re: The present and future of Randalls

Post by storewanderer »

I would definitely agree that Randalls was ruined by Safeway at the point Albertsons acquired the chain. The fact that Albertsons has kept it going this long and done some remodels is somewhat curious to me. There were pretty strong rumors that the entire Safeway TX operation was about to get the same treatment as Genuardi's or Dominicks got... but who knows how true the rumors were. TX is a growing market and Safeway did have some store development activities going on there a year or two before the merger with Albertsons took place, so who knows.
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Re: The present and future of Randalls

Post by pseudo3d »

storewanderer wrote: February 15th, 2020, 11:07 pm Safeway did have some store development activities going on there a year or two before the merger with Albertsons took place, so who knows.
Safeway may have kept Dallas or even Austin (the Leander store that opened in November 2016 was under contract since 2012), but Houston was a dead market walking, the last "new" store opened in 2011 (replacing an existing store) and new stores hadn't opened since...2002? (for reference, the year Kmart stopped building new stores).
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Re: The present and future of Randalls

Post by storewanderer »

pseudo3d wrote: February 16th, 2020, 7:30 am
storewanderer wrote: February 15th, 2020, 11:07 pm Safeway did have some store development activities going on there a year or two before the merger with Albertsons took place, so who knows.
Safeway may have kept Dallas or even Austin (the Leander store that opened in November 2016 was under contract since 2012), but Houston was a dead market walking, the last "new" store opened in 2011 (replacing an existing store) and new stores hadn't opened since...2002? (for reference, the year Kmart stopped building new stores).
To be fair I can count a lot of markets in the west where Safeway has built no or maybe one or two new stores since 2002, so there were a lot more markets than just Houston that fit that profile.

In general these large publicly traded grocers do not seem to be too eager to build new stores. It is like they all got spooked back when Wal Mart was building supercenters in mass and new store expansion programs were scaled back at all of the grocers. Albertsons in the late 90's and early 00's kept talking hundreds of new stores but I don't really know where those new stores were or if they ever materialized. Safeway in that period was focused heavily on expanding/replacing smaller older stores. Kroger's activity seemed to vary by division back then. More recently in the 10's, Kroger had a good run building new Marketplace stores but then a couple years ago rather than keep that up, decided to piss money away on "online initiatives" instead of keep up that positive trend. This is a big part of why these large publicly traded grocers keep losing market share to other formats and privately held or employee owned chains that will actually build new stores.

Issue here is, how many new stores has Hy Vee, WinCo, Rouses, Publix, all those small regionals back east like the Shop Rites or the Market Baskets, or various other privately or employee held conventional chains built since the Wal Mart Supercenter scare craze hit the industry 25 years ago? Hundreds of new stores, collectively. Dozens of new markets have been entered by all of these chains and in many cases these chains have quickly captured a top 3 market share position in the new markets they have entered. There is no reason why the publicly held chains could not have done the same thing, other than that they simply can't seem to move.
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Re: The present and future of Randalls

Post by pseudo3d »

storewanderer wrote: February 16th, 2020, 12:51 pm
pseudo3d wrote: February 16th, 2020, 7:30 am
storewanderer wrote: February 15th, 2020, 11:07 pm Safeway did have some store development activities going on there a year or two before the merger with Albertsons took place, so who knows.
Safeway may have kept Dallas or even Austin (the Leander store that opened in November 2016 was under contract since 2012), but Houston was a dead market walking, the last "new" store opened in 2011 (replacing an existing store) and new stores hadn't opened since...2002? (for reference, the year Kmart stopped building new stores).
To be fair I can count a lot of markets in the west where Safeway has built no or maybe one or two new stores since 2002, so there were a lot more markets than just Houston that fit that profile.

In general these large publicly traded grocers do not seem to be too eager to build new stores. It is like they all got spooked back when Wal Mart was building supercenters in mass and new store expansion programs were scaled back at all of the grocers. Albertsons in the late 90's and early 00's kept talking hundreds of new stores but I don't really know where those new stores were or if they ever materialized. Safeway in that period was focused heavily on expanding/replacing smaller older stores. Kroger's activity seemed to vary by division back then. More recently in the 10's, Kroger had a good run building new Marketplace stores but then a couple years ago rather than keep that up, decided to piss money away on "online initiatives" instead of keep up that positive trend. This is a big part of why these large publicly traded grocers keep losing market share to other formats and privately held or employee owned chains that will actually build new stores.

Issue here is, how many new stores has Hy Vee, WinCo, Rouses, Publix, all those small regionals back east like the Shop Rites or the Market Baskets, or various other privately or employee held conventional chains built since the Wal Mart Supercenter scare craze hit the industry 25 years ago? Hundreds of new stores, collectively. Dozens of new markets have been entered by all of these chains and in many cases these chains have quickly captured a top 3 market share position in the new markets they have entered. There is no reason why the publicly held chains could not have done the same thing, other than that they simply can't seem to move.
I would say that the answer is more complicated than just Walmart, and rather the conditions the chains were in during the 1980s.

Safeway suffered a significant setback in the late 1980s when it had to divest about half of its divisions, most of those stores they had built themselves and many (though the minority) were less than 10 years old. The company's main growth since then had been acquisitions, mirroring Albertsons in many ways.

Albertsons was also publicly traded, and did new-builds across the country during the 1990s and early 2000s. Nearly all of the Houston market were new-builds (dozens of new stores) and when it was sold, the stores that Kroger received tended to be only 2 or 3 years old. They also continued to build up new stores in Florida, north Texas, and Louisiana in the same time frame, and I believe Denver as well. Unlike Walmart, in general, their stores tended to be in medium-sized to large sized markets and satellite communities, avoiding small communities. And of course, they got a little greedy with the American Stores acquisition, the shockwave still scars the company. The high debt load and issues with existing stores have taken precedence over organic growth.

Winn-Dixie had a lot of stores going into the 1980s but their expansion was already slowed before Walmart started to take off, in due to a lot of problems (a bunch of dated stores, which Winn-Dixie didn't help with their 2000 purchase of Delchamps/Jitney Jungle).

Kroger built most of its stores from acquisitions (back in the 1960s, with rebranding) but made the right decision early on to scuttle the divisions that weren't working (Florida, Pittsburgh, etc.) and strengthen the ones that were. They did enter new markets as late as 1980 but I recall reading that they had to fight off a hostile takeover in the mid-1980s that did not cause divisions to be axed, but it killed their ability to really build stores, and with labor issues and competition threatening what they did have, they focused on those markets instead. Kroger also has a pretty high debt load (more than Albertsons now!)

As for private chains, it should be noted that after the Pantry stores were built in the Houston in the 1990s, H-E-B hasn't really entered any new markets since. They're only now entering Lubbock, and Dallas-Fort Worth still only has Central Market stores.
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Re: The present and future of Randalls

Post by klkla »

pseudo3d wrote: February 16th, 2020, 2:12 pm Kroger also has a pretty high debt load (more than Albertsons now!)
They do, but that can be a little misleading because Kroger is a bigger company. Kroger's debt to equity ratio is 2.3 and Albertson's is 2.9.

Both have made progress in reducing their debt over the last year. Albertson's cut debt by $1.8 billion and Kroger by $1.9 billion. Both companies are at least taking advantage of the strong economy, which has grown steadily for the last ten years, although that growth has slowed to only 2.3% in 2019.
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Re: The present and future of Randalls

Post by veteran+ »

Pseudo: "Winn-Dixie had a lot of stores going into the 1980s but their expansion was already slowed before Walmart started to take off, in due to a lot of problems (a bunch of dated stores, which Winn-Dixie didn't help with their 2000 purchase of Delchamps/Jitney Jungle)."

Agreed but there is no excuse for their poor direction choices.

There was also fast moving and tsunami change in cultural and economic demographics that was not effectively analyzed.

They had a huge opportunity with the demise of Pantry Pride that they could have leveraged and used to their benefit.
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Re: The present and future of Randalls

Post by wnetmacman »

pseudo3d wrote: February 16th, 2020, 2:12 pm I would say that the answer is more complicated than just Walmart, and rather the conditions the chains were in during the 1980s.

Safeway suffered a significant setback in the late 1980s when it had to divest about half of its divisions, most of those stores they had built themselves and many (though the minority) were less than 10 years old. The company's main growth since then had been acquisitions, mirroring Albertsons in many ways.

Albertsons was also publicly traded, and did new-builds across the country during the 1990s and early 2000s. Nearly all of the Houston market were new-builds (dozens of new stores) and when it was sold, the stores that Kroger received tended to be only 2 or 3 years old. They also continued to build up new stores in Florida, north Texas, and Louisiana in the same time frame, and I believe Denver as well. Unlike Walmart, in general, their stores tended to be in medium-sized to large sized markets and satellite communities, avoiding small communities. And of course, they got a little greedy with the American Stores acquisition, the shockwave still scars the company. The high debt load and issues with existing stores have taken precedence over organic growth.

Winn-Dixie had a lot of stores going into the 1980s but their expansion was already slowed before Walmart started to take off, in due to a lot of problems (a bunch of dated stores, which Winn-Dixie didn't help with their 2000 purchase of Delchamps/Jitney Jungle).

Kroger built most of its stores from acquisitions (back in the 1960s, with rebranding) but made the right decision early on to scuttle the divisions that weren't working (Florida, Pittsburgh, etc.) and strengthen the ones that were. They did enter new markets as late as 1980 but I recall reading that they had to fight off a hostile takeover in the mid-1980s that did not cause divisions to be axed, but it killed their ability to really build stores, and with labor issues and competition threatening what they did have, they focused on those markets instead. Kroger also has a pretty high debt load (more than Albertsons now!)

As for private chains, it should be noted that after the Pantry stores were built in the Houston in the 1990s, H-E-B hasn't really entered any new markets since. They're only now entering Lubbock, and Dallas-Fort Worth still only has Central Market stores.
The Houston market has long, long been fraught with a general dislike of outside management. Kroger was initially Henke & Pillot, Randalls and Weingarten were originally locally owned, and Albertsons and Safeway were long outsiders.

National intrusion by Kroger began changes in the Houston Market as far back as their purchase of Henke's. While that hasn't been bad for Kroger, it changed the face of Houston retailing, as the local touch began fading at that time. Weingarten first sold out to Grand Union, then most of the stores went to Safeway, who didn't fare especially well with them, closing or selling out by 1988. The sold stores mostly went to Apple Tree Markets, who, to put it mildly, tanked. Randalls sold out to Safeway, and Albertsons 'tried' an invasion, but as with most of Albertsons' mid-late 90's invasions, they just didn't get local right at all. Albertsons felt that the Boise store worked, so it should work in Houston. It should work throughout rural Louisiana (spoiler alert: It didn't!). Many of the stores outside Albertsons pre-90's marketing area that were part of this expansion are now closed or were sold to other operators. I know for a fact that at least four Louisiana stores built in new locales during this time are all gone, just simply because they couldn't compete with local chains.

Then Albertsons abandoned Houston. I would not call it a sold division, because that would indicate that the whole group of stores went to one operator, but it didn't. The DC went to 99 Cents Only, and HEB, Food Town, Kroger and several others got stores. They were broken up. It was like a bad divorce, but nobody got the kids.

Safeway's not-so-triumphant return via Randalls has been more like a slow, painful death. Stores are dropping one-by-one. And the ones remaining aren't doing as well as they once did. Because Albertsons *STILL* doesn't understand Houston. And now, they've stopped trying.

Winn-Dixie's major mistake has been that they seize incorrect opportunities, or they do it too late. During the 50's and 60's, they bought any supermarket that didn't run away fast enough. Then the government stopped them for 10 years. As soon as that ban ended, they bought Kimbell, Inc., of Fort Worth. Another mistake; WD was a Florida company. They didn't understand what Texas wanted, and by 2005 they ran out of money to try. The Delchamps/Jitney store purchases were similar to Albertsons' Houston breakup; it wasn't every store, only the ones who survived all the other failures. Many markets just died out. And now, WD (or SEG, as they want to be known now) is a shell of its former self. At their height, WD operated over 1500 supermarkets; they now have less than 600 between WD *and* Bi-Lo.

So my point is that it isn't a lack of availability; it's a lack of market understanding, and it's rampant among national retailers.
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Re: The present and future of Randalls

Post by veteran+ »

Yes, W/D was truly a Florida chain but they messed up there as well.

They had a huge opportunity when Pantry Pride finally disappeared. Every other major grocery retailer was gone except Publix and the growing Walmart. Albertsons was always a joke in Florida and anyone else did not have a mass presence to be a contender.

This was a market that W/D should have known forwards and backwards and if they were truly paying attention to the demographic changes they could have gobbled up many Pantry Prides and give Publix and Walmart a good contest.
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Re: The present and future of Randalls

Post by pseudo3d »

wnetmacman wrote: March 18th, 2020, 2:56 pm
The Houston market has long, long been fraught with a general dislike of outside management. Kroger was initially Henke & Pillot, Randalls and Weingarten were originally locally owned, and Albertsons and Safeway were long outsiders.

National intrusion by Kroger began changes in the Houston Market as far back as their purchase of Henke's. While that hasn't been bad for Kroger, it changed the face of Houston retailing, as the local touch began fading at that time. Weingarten first sold out to Grand Union, then most of the stores went to Safeway, who didn't fare especially well with them, closing or selling out by 1988. The sold stores mostly went to Apple Tree Markets, who, to put it mildly, tanked. Randalls sold out to Safeway, and Albertsons 'tried' an invasion, but as with most of Albertsons' mid-late 90's invasions, they just didn't get local right at all. Albertsons felt that the Boise store worked, so it should work in Houston. It should work throughout rural Louisiana (spoiler alert: It didn't!). Many of the stores outside Albertsons pre-90's marketing area that were part of this expansion are now closed or were sold to other operators. I know for a fact that at least four Louisiana stores built in new locales during this time are all gone, just simply because they couldn't compete with local chains.

Then Albertsons abandoned Houston. I would not call it a sold division, because that would indicate that the whole group of stores went to one operator, but it didn't. The DC went to 99 Cents Only, and HEB, Food Town, Kroger and several others got stores. They were broken up. It was like a bad divorce, but nobody got the kids.

Safeway's not-so-triumphant return via Randalls has been more like a slow, painful death. Stores are dropping one-by-one. And the ones remaining aren't doing as well as they once did. Because Albertsons *STILL* doesn't understand Houston. And now, they've stopped trying.

Winn-Dixie's major mistake has been that they seize incorrect opportunities, or they do it too late. During the 50's and 60's, they bought any supermarket that didn't run away fast enough. Then the government stopped them for 10 years. As soon as that ban ended, they bought Kimbell, Inc., of Fort Worth. Another mistake; WD was a Florida company. They didn't understand what Texas wanted, and by 2005 they ran out of money to try. The Delchamps/Jitney store purchases were similar to Albertsons' Houston breakup; it wasn't every store, only the ones who survived all the other failures. Many markets just died out. And now, WD (or SEG, as they want to be known now) is a shell of its former self. At their height, WD operated over 1500 supermarkets; they now have less than 600 between WD *and* Bi-Lo.

So my point is that it isn't a lack of availability; it's a lack of market understanding, and it's rampant among national retailers.
Like I said, it's less about Albertsons "understanding" the market and more of the fact that other circumstances forced it out.

Safeway did lose some loyal Weingarten shoppers because it was a California company, but ultimately it all came down to a company that had to cut some limbs to their debt problem incurred from trying to prevent an acquisition back in the 1980s. Ultimately, one of these "limbs" was their own Southern California division, which clearly couldn't have been a "failure" because Vons did well with them. Many of the Houston stores were profitable.

AppleTree's problem was that they started with a bunch of debt from Safeway, with Safeway initially owning a lot of the real estate, and a bunch of outdated stores. The few stores that were new (or remodeled) were not enough to save the chain, and with the price war incurred from the H-E-B Pantry/Food Lion entrance, and new prototypes from other chains meant that AppleTree could neither have the biggest, nicest, or cheapest stores. As a result, they collapsed, even if they were a "local" chain.

Albertsons had some success with the suburbs and other cities in Texas in the early 1990s, but in the end, it was an uphill battle for Houston (first store was 1995, I believe) that they couldn't get a hold on without buying out a competitor. Some lousy store locations didn't help matters, and they COULD'VE fought Randalls off as it suffered under Safeway's rule. But the ASC buyout ended that, and Johnston's mismanagement during his first months did no favors for the fledgling division.

Randalls was in bad shape when Albertsons purchased it, and with the solidifying of H-E-B's position in the market, the presence of Walmart and specialty grocers, and loss of several prime locations, trying to make Randalls go anywhere (with its tarnished reputation) wouldn't have much weight. I don't know why they closed the specific group of stores last time around, but like their last entrance into the market, they have bigger fish to fry. But to say that Albertsons "doesn't understand the Houston market" is painting with a broad brush.
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Re: The present and future of Randalls

Post by Bagels »

veteran+ wrote: March 18th, 2020, 3:33 pm Yes, W/D was truly a Florida chain but they messed up there as well.

They had a huge opportunity when Pantry Pride finally disappeared. Every other major grocery retailer was gone except Publix and the growing Walmart. Albertsons was always a joke in Florida and anyone else did not have a mass presence to be a contender.

This was a market that W/D should have known forwards and backwards and if they were truly paying attention to the demographic changes they could have gobbled up many Pantry Prides and give Publix and Walmart a good contest.
The Pantry Prides (Food Fair) were old and in rough shape. Winn Dixie did try to make a go of it in Florida -- among other acquisitions, it acquired up most of the Goodings in the Orlando-area -- but was crushed by Walmart, which focused on the Southeast (including Florida) for its initial supermarkets. Remember, most of those early supercenters had full-service meat, deli and bakery counters (Walmart has since eliminated full-service meat counters, and limited many deli and bakery service items). Winn Dixie simply couldn't compete with Walmart on price, or Publix on its shopping experience. IMO, it's remarkable there's as many Winn Dixies left as there is.
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