Raleys selling 2 Food Sources to Food 4 Less

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ninersdd
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Raleys selling 2 Food Sources to Food 4 Less

Post by ninersdd »

https://www.bizjournals.com/sacramento/ ... RFVBIn0%3D


One in Rio Linda and another on Bradshaw near Mather. Also no more Sacramento stores, just Hayward, Reno, and Stockton.
Last edited by ninersdd on June 25th, 2020, 11:52 pm, edited 1 time in total.
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Re: Raleys selling 2 Food Sources to Food 4 Less

Post by storewanderer »

Also the 4th store in that "division" is the Sak N Save in Reno that they bought from Scolaris. Food Source in all but name.

Will be interesting to see what happens to the others. Hayward is a pure Food Source (built as Food Source). Reno and Stockton are conversions of poorly performing Raleys Stores. Sak N Save has been a discount format store forever, I think it started as some kind of discount store (not a grocery store). Raleys has really killed business over at the Sak N Save, but it sure feels safer over there since Raleys took it over. Cleaner, fewer people loitering, and better behaved staff.

This is a format Raleys never understood or did well with. I have no clue why they have operated this format as long as they have- The stores built as Food Source, were clear efforts to open stores in locations where a standard format Raleys would not have worked. As far as the conversion stores go, I am not sure if it was a way to ride out some leases on poorly performing Raleys locations or what.

Raleys continues to source separate (lower quality) meat, produce, bakery, etc. for these Food Source Stores. Given the low store count I don't see how effective this is.
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Re: Raleys selling 2 Food Sources to Food 4 Less

Post by reymann »

maybe save mart can scoop up the remaining food source stores and rebrand them as foodmaxx. save mart is a lot more successful in operating a price impact store than raleys.
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Re: Raleys selling 2 Food Sources to Food 4 Less

Post by storewanderer »

Food Maxx has performed terrible in Sparks and Carson City. Horribly run stores, rarely more than 1 checkstand open (but they do have 5-6 self checkouts, which you can usually get to one of without a wait). Poorly stocked, almost no employees, and prices higher than Smiths (who is the nearest competitor to both of these Food Maxx Stores). The Sparks and Carson City Smiths have picked up a ton of volume since Save Mart converted these two stores to Food Maxx, It didn't help that the "conversion" involved the stores being closed for like 6 or 8 months (they sat empty for all but about five weeks). The US Bank inside the Sparks Food Maxx recently closed. Sparks Smiths still has its US Bank. Some of the prices at Food Maxx are higher than a full service Save Mart. I am surprised anyone shops them.

But I would agree in general the CA Food Maxx operations seem a lot more effective than they have been up here in NV and they do pretty high volumes. Save Mart cannot compete against Wal Mart, Smiths, and WinCo in an effective manner. But up here in NV the Food Maxx are pretty much like the Food Sources. Actually the Food Source locations have more staffing than Food Maxx, but the business level is similar.

Maybe Raleys will keep these last 4 Food Source/Sak N Save Stores.
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Re: Raleys selling 2 Food Sources to Food 4 Less

Post by ninersdd »

The Food Source on Bradshaw just closed. Will reopen as Food4Less October 7.
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Re: Raleys selling 2 Food Sources to Food 4 Less

Post by storewanderer »

Raleys seems to have closed the Food Source website sometime in the past couple weeks.

No sign of changes to operations at either of the Reno locations yet... rough looking stores without much merchandise. I think if the stores were up for sale they'd look better than they look. Maybe they plan to hold onto these locations.
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Re: Raleys selling 2 Food Sources to Food 4 Less

Post by storewanderer »

Raleys in the past week made an update to its cash registers to run EMV Contactless Payments which assign a specific payment key to each tap card/phone transaction- at the Raleys locations. Previously they ran MSD Contactless (this is technology that should have been put out of service over a year ago per the card networks but a number of retailers continue to use it).

I went to Food Source today and they are still processing via MSD Contactless there. Also their weekly ad is now a letter size piece of paper double sided in color with specials printed on it, not the old mailer ad they were doing before.

I would hope they will upgrade Food Source to the more secure EMV Contactless like they have the regular Raleys. They are on the same POS system, the only difference is Food Source edits out a loyalty card prompt on its pinpad.
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Re: Raleys selling 2 Food Sources to Food 4 Less

Post by storewanderer »

Food Source updated to EMV Contactless payments and their website is running again.

Tough to know what is going on. Reno Food Source is not stocked well at all- shelves are super thin all over and have been this way for months. It is being restocked, minimally, and only when shelves get 100% empty. Meat and produce are okay, actually meat is very cheap there and produce for what they are charging is a good value. The store does have foot traffic... Mostly Equaline private label in their drug department rather than Top Care as normal Raleys have.
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Re: Raleys selling 2 Food Sources to Food 4 Less

Post by storewanderer »

Took a look at the Rio Linda F4L Franchise Store this afternoon. Only 10-15 shoppers inside the store, but they had 4 cashiers open. Also had an employee at the front door doing a tally of customers entering as well as a security guard behind her.

Not real impressed with this store. While it is very clean, bright, and orderly, that is about where the positives stop. The prices on produce, meat, bakery, and what little they have of deli (hardly anything- 75% of the refrigeration is filled with drinks now where Food Source would have had prepack sandwiches, prepack salads, etc.) are significantly higher than Food Source pricing. The quality may be slightly better than Food Source... Once I got into dairy and center store I found a lot of better priced items but still wasn't real impressed with the overall mix of items in this store and its overall pricing. Best Yet items are missing in various categories throughout the store such as paper products, preserves, and most dairy, so not sure what the deal with that is. The center store had a lot of out of stocks as well.

Given the lack of customers in the store and that there is no competition for 10-15 minutes, it appears other customers have similar feelings. Not entirely sure how Food Source did with this store (I heard it was one of their better stores... but Food Source has always been such a poorly performing format even since it was implemented in the 90's, I'm not sure what that translates into business-wise).

It is really too bad Kroger did not take this store and convert it to a FoodsCo. I think FoodsCo would be very successful in this location. This franchise F4L with an oddly merchandised and not well stocked center store and high priced perishables (and very limited bakery/deli prepped in store) does not seem to be the right fit. Food Maxx would have also been a much better fit here. This does not seem like the best neighborhood at all, but it definitely has the population to support a lower priced store. Hopefully this F4L franchise will do what is necessary to make this store work (needs to cut the prices on perishables 20-30% across the board to get them back down to Food Source pricing levels and bring back store prepped deli items, to start).
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Re: Raleys selling 2 Food Sources to Food 4 Less

Post by storewanderer »

Reno Food Source now closes at 9 PM...

Store is at a REALLY low level of inventory. Lowest I've ever seen there. They did a contracted inventory count recently, but should have restocked by now...
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