Walmart Supercenter wasn't a huge force in Houston until the early to mid 2000s. Contrary to popular belief, Albertsons did have a fighting chance in Houston in the 1990s. Randalls was the market leader and had the best stores, but over-expansion of the chain had put a strain on new openings, ultimately leading to the purchase of it by Safeway. AppleTree, which had spawned from the original Safeway division, was essentially history, dwindling to a few independent stores. Kroger was launching the Signature stores during the 1990s and had a large market share but most of its stores were small and out of date. HEB didn’t even run full size supermarkets.retailfanmitchell019 wrote: ↑January 13th, 2020, 6:17 pmTo me, there were three major problems that led to Albertsons being split up in 2006.
1. Expansion into areas in the Southern and Great Plains states where there was a lot of established competition, not mention Wal-Mart Supercenters starting to become a threat. This explains why San Antonio, Houston and Tennessee expansions proved to be failures which they got rid of in the 2001-2002 restructuring.
The Des Moines stores were failures too. ABS bought 3 stores from discount chain Super One Foods in 1998, before converting those stores to Albertsons. The problem with those stores is that they were located in lower-income areas, and they had a fairly low store count in the area. Albertsons considered building a store from the ground up in a higher-income Des Moines suburb (Clive) but the plan was ultimately aborted. None of the former Albertsons in DSM are occupied by supermarkets today. Here is a former Super One/ABS/Dahls:
https://www.flickr.com/photos/fourstarc ... 7249780961
2. The infamous Lucky/Albertsons marriage. This was real problem in the Bay Area, as ABS had very little presence there before the ASC acquisition. As such, Bay Area shoppers were very angry with the name change to Albertsons.
Lucky was not only a venerable name in the Bay Area where it began, but over most of California. To California shoppers, the Lucky name always meant low prices. The rest of the ASC acquisition did fine for ABS.
3. The $2.5 billion acquisition of Shaw's from UK-based Sainsbury. ABS already had troubles with expansion failures and the Lucky merger, not to mention they already sold off the Osco Drug stores in New England, plus their major debt load.
The ASC acquisition changed all that and Albertsons had to offload some divisions to put out the fires with Lucky. The end result was mostly that Kroger got a number of Albertsons stores to upgrade their fleet, especially as HEB had come to full blossom.
The Des Moines stores, on the other hand, were a mistake. The store format was completely at odds with what Albertsons wanted with their stores, but they pushed ahead and made all the changes to the stores (over time, if what newspapers say is correct). It's possible that Albertsons could’ve given the market the care it needed to make it but with the ASC acquisition, it wasn't possible.
San Antonio was a bit different, they had been in the market for years but it wasn't making much headway against H-E-B (especially as they built newer stores), and some outlier stores like New Braunfels and Kerrville remained up until 2011.