klkla wrote: ↑November 14th, 2020, 8:49 pm
Safeway was never competitive with Lucky on pricing except for loss leaders in the ad. It was during this period Lucky went with a rewards card instead of every low prices, however, and that might have lead to that perception.
While Lucky may not have been considered a 'distressed asset' the return on investment for the remodels and subsequent failure of The Other Side of Lucky campaign was what lead to the stock price dropping so much and made them vulnerable to a takeover. They didn't spend a lot of money on Acme so there wasn't much expectation from Wall Street for that division. They did spend an astronomical amount of money on Lucky, however, and the return was much weaker than expected and was a much bigger factor in the decline of the company.
Safeway NorCal was absolutely competitive with Lucky in the mid-late 90's on everyday pricing (especially on perishable and private label items) and there were supposedly some legal reasons why Lucky stopped using the slogan "the low price leader every day" and switched to the slogan "Lucky Means Low Prices." Legal reasons as in, the point was raised that Safeway's pricing was at or below their pricing on many of items everyday and also came out ahead on various baskets tested. The other issue was F4L in SoCal and those price surveys they did, kept coming in below Lucky down there, hence their slogan "the true low price leader."
Back when Lucky instituted the card in NorCal, Safeway was heavy with monthly coupon books, etc. But it wasn't "full price or no deal" at Safeway- there were sale prices, then if you had the coupon you got a better deal. For instance the bread was 1.99 regular, then the sale price was 1.59, then the coupon was for buy 1 get 1 free. Or the canned vegetable was .79 regular, then the sale price was .50, then the coupon was .39. That sort of thing.
On the other hand, those Lucky Stores from the 70's, in the mid 90's, desperately needed those remodels to remain competitive. A number of those 70's stores had no bakery/deli/seafood and one of the objectives of that remodel program was to add those departments into the stores (even if they were very small departments). And looking at how those remodels played out, many of them maintained those basic interiors, floors, etc. well into the 2010's and only recently have those stores really fallen off either through actual extensive remodels or closures. Had Lucky not done that remodel program in the mid 90's, many more of their stores would have fallen into horrid disrepair by the early 2000's.
In absence of that Lucky remodel program in the mid 90's, I think Lucky would have been another Acme by the late 90's...
I'm not sure ASC ever got a real good ROI on the Lucky/Sav-On format stores in NorCal though. They didn't run them long before Albertsons took over and screwed up badly. I assume the combo stores in SoCal had similar questionable results. They definitely never got close to Jewel/Osco level volumes, despite being nice big stores, clean, well merchandised, nicely laid out.
I wonder how Lucky's late 90's results differed in Las Vegas where they did not do combo stores (they did the Sav-On next door as a separate entity so they could get more slot machines in the two stores).