Raley's to buy Arizona chain Bashas'

Arizona, Hawaii, Nevada, New Mexico, Oklahoma, and Texas. No non-grocery posts.
Romr123
Assistant Store Manager
Assistant Store Manager
Posts: 693
Joined: February 1st, 2021, 4:26 pm
Has thanked: 37 times
Been thanked: 56 times
Status: Offline

Re: Raley's to buy Arizona chain Bashas'

Post by Romr123 »

Consumers Reports does reviews of supermarkets periodically, and it always seems that the coastal supermarkets (A&P/Acme/Stop and Shop/Shaws/Safeway/Ralphs/etc) never are quite as well thought of as the Midwestern/inland Northeast supermarkets (and Publix). Stater Bros is roughly equivalent to New England Market Basket, but the rest of the stores out here kinda melt into a couple of high-priced homogenous masses (pricy homogenous upscale like Gelsons/Bristol Farms/Jensens; and pricy conventional like ABS/Ralphs which are pretty indistinguishable within their classification.)
pseudo3d
Posts: 3851
Joined: November 12th, 2015, 7:01 pm
Has thanked: 5 times
Been thanked: 77 times
Status: Offline

Re: Raley's to buy Arizona chain Bashas'

Post by pseudo3d »

veteran+ wrote: March 6th, 2022, 8:05 am Wow........................

and sigh.............................

:roll:

It's always the business environment and the Cali government and NOT the corporations and their leaders.

Got it ;)
Have you seen how long Safeway/Vons takes to do any sort of store rebuilds in California? It's not like in Texas, where they can close a store, knock it down, and build a new one within a year, the back-n-forths in California (especially S.F. and upscale parts around LA) take like 5 years.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: Raley's to buy Arizona chain Bashas'

Post by storewanderer »

pseudo3d wrote: March 7th, 2022, 8:17 am
veteran+ wrote: March 6th, 2022, 8:05 am Wow........................

and sigh.............................

:roll:

It's always the business environment and the Cali government and NOT the corporations and their leaders.

Got it ;)
Have you seen how long Safeway/Vons takes to do any sort of store rebuilds in California? It's not like in Texas, where they can close a store, knock it down, and build a new one within a year, the back-n-forths in California (especially S.F. and upscale parts around LA) take like 5 years.
The land value situation is complicating this further as you see more and more store sites being repurposed into apartments combined with retail, or efforts to make such a development. Highest and best use of land certainly rules and the developers know this and are willing to spend the years to get it right (well, it is a matter of opinion what is right)- or should we say, get the development in place that will make the developers the most money.

I think there is also less motivation by the retailer to do speedy redevelopments in California because typically they are going to "own" the neighborhood no matter what they do. It isn't like they are in a rush to get a larger/better store up, because of competition that has already been approved and is about to show up nearby. Their motivation to get a larger/better store up is basically a slam dunk decision for them to replace an aging facility/aging equipment, demolish or shift the position of their store so the site can be repurposed into other uses and the site more productive from a real estate standpoint, or invest in their facility as a defensive move to keep a competitor from ever getting approved to come in nearby.
ClownLoach
Valued Contributor
Valued Contributor
Posts: 2689
Joined: April 4th, 2016, 10:55 pm
Has thanked: 39 times
Been thanked: 288 times
Status: Offline

Re: Raley's to buy Arizona chain Bashas'

Post by ClownLoach »

storewanderer wrote: March 7th, 2022, 10:30 pm
pseudo3d wrote: March 7th, 2022, 8:17 am
veteran+ wrote: March 6th, 2022, 8:05 am Wow........................

and sigh.............................

:roll:

It's always the business environment and the Cali government and NOT the corporations and their leaders.

Got it ;)
Have you seen how long Safeway/Vons takes to do any sort of store rebuilds in California? It's not like in Texas, where they can close a store, knock it down, and build a new one within a year, the back-n-forths in California (especially S.F. and upscale parts around LA) take like 5 years.
The land value situation is complicating this further as you see more and more store sites being repurposed into apartments combined with retail, or efforts to make such a development. Highest and best use of land certainly rules and the developers know this and are willing to spend the years to get it right (well, it is a matter of opinion what is right)- or should we say, get the development in place that will make the developers the most money.

I think there is also less motivation by the retailer to do speedy redevelopments in California because typically they are going to "own" the neighborhood no matter what they do. It isn't like they are in a rush to get a larger/better store up, because of competition that has already been approved and is about to show up nearby. Their motivation to get a larger/better store up is basically a slam dunk decision for them to replace an aging facility/aging equipment, demolish or shift the position of their store so the site can be repurposed into other uses and the site more productive from a real estate standpoint, or invest in their facility as a defensive move to keep a competitor from ever getting approved to come in nearby.
One word: earthquakes.

Seismic requirements are not a California government "thing" but a requirement for insurance. In Texas you can build a cinder block or pre-poured concrete tilt up in a few months. You just attach the walls and roof to a stable concrete base.

In California due to liquefaction the first step becomes pounding metal or concrete core pilings up to 100 feet into the ground depending on how far you must go to reach solid bedrock. That alone is a year. Then every aspect of the wall construction must be heavily reinforced and woven with rebar. Walls and roof beams both must be heavily load bearing. All must be thicker and heavier than material used elsewhere. Open ceiling stores are an easy comparison. If you look at a recent build on the West Coast (since now Oregon and Washington are considered even more earthquake risk than California) versus anything in the Midwest you'll see that the stores have twice as many columns and beams, and they're much heavier. This is why it costs at least double to build here. The government has nothing to do with it.
ClownLoach
Valued Contributor
Valued Contributor
Posts: 2689
Joined: April 4th, 2016, 10:55 pm
Has thanked: 39 times
Been thanked: 288 times
Status: Offline

Re: Raley's to buy Arizona chain Bashas'

Post by ClownLoach »

storewanderer wrote: March 5th, 2022, 9:05 pm
bryceleinan wrote: March 5th, 2022, 1:34 pm
storewanderer wrote: March 5th, 2022, 1:09 am
If you have a major chain which I won't go into names, that operates primarily conventional format stores over 65k square feet over in AZ or NV, then in CA barely runs any conventional format store above about 55k square feet, those CA Stores are inferior to what is in the neighboring states. Add to it their CA Stores have drastically higher prices than what they have in AZ/NV for the exact same products and the exact same level of service, and it just adds to the experience being even worse in CA for the consumer. If the stores did a good enough job on perimeter departments you would at least use them sometimes for those items and not always feel the need to go to various other places like independent delis (not sure how many of those there even are... I can count on one hand how many are in Sacramento metro and one is a 25k square foot grocery store), Farmer's Markets that aren't even present various weeks of the year, or independent bakeries (again not very present and often focused on specific like cakes only, breads only, etc.).
Something strange I noticed at the Raley's in Carson City is that they now carry some breads bearing the Panera Bread name, along with the soups. I am not sure what is going to happen when Panera opens down the street from this store over the summer, however, it is kinda weird given that it's probably a par-baked product. They're also famous for their non-competes, as evidenced by the formerly nearby Walmart moving a couple miles south due to a deed restriction from Raley's preventing a supercenter.

That is also another reason Panera did not proceed with their south Reno location - Safeway has a non-compete clause, and when you read it, Panera is basically in it, and I don't think I have seen too many centers with a Panera and a Safeway together, except for South Shore Center in Alameda.
The grocery store Panera products have nothing to do with whether or not a Panera unit can open in a shopping center. That is a completely separate product line run by a different group. Panera has par baked breads in many grocery stores, as well as heat and serve macaroni and cheese, and other items. I think I've seen some of these at Smiths and have definitely seen them at Save Mart as well.

The reason the Panera in South Reno was shelved was because the franchisee who was going to develop it ran into financial problems and that franchisee did not go through with developing the locations in the Reno market as planned. The franchisee who assumed the market did not want that location. I think that franchisee also is no longer developing this market and at this point we are either on about the 5th franchisee they've tried to get to develop this market or they are going to just open sites up as corporate sites here. This is why there are still no Paneras open in Reno. The latest plan for South Reno is they plan to open behind the Taco Bell at South Virginia and Neil in Reno with a new construction unit. Also a new unit at Legend's in Sparks near the Chickfila, not sure any construction has started there either. I think both of those approved by the respective city. The Carson City Panera has been a finished shell for months but so far nobody has installed any fixtures inside and it does not appear like anyone is in any hurry to open it. That does not strike me as a great spot for Panera but we will see how it does. The Panera at University of Nevada Reno opened as a corporate Panera after significant delays (COVID related among other issues) and it was not originally planned to be a corporate unit.

Typical Panera locations are not in grocery anchored centers but rather in power centers or near office buildings (would expect to see one somewhere around Kietzke and McCarran in Reno).

The Panera brand is weaker than it once was and I feel its best days are behind it. Another wrinkle now is the franchisor rolled Einstein Brothers and Caribou into Panera as well.
This is off topic but Panera is the ultimate example of how franchising destroys brands. They started as St. Louis Bread Company and were massively successful from day one with company owned stores that made everything from scratch.

Fast forward to a few thousand units and they decided to franchise the entire system and sell every unit. They had to develop a support system which meant a centralized commissary process. Those scratch breads became par baked frozen dough trucked into every location nationwide. Fresh food became cryovac bags, batch prepped sandwiches, sous vide soups, Pre sliced meats and vegetables in shrink wrap trays, thawed pastry, and microwaves (even a customer use one for warming up stale pastries!). Literally everything in the restaurant is made in a factory now except the batch prepped fried egg patties that get cooked twelve at a time until the yolk is solid and they can scrape them into trays in a holding steamer.

Yuck.

They're closing left and right, disappearing even faster than Quiznos, Subway, and other famous franchise disaster stories.
ClownLoach
Valued Contributor
Valued Contributor
Posts: 2689
Joined: April 4th, 2016, 10:55 pm
Has thanked: 39 times
Been thanked: 288 times
Status: Offline

Re: Raley's to buy Arizona chain Bashas'

Post by ClownLoach »

storewanderer wrote: March 6th, 2022, 11:10 am
veteran+ wrote: March 6th, 2022, 8:05 am Wow........................

and sigh.............................

:roll:

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.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: Raley's to buy Arizona chain Bashas'

Post by storewanderer »

ClownLoach wrote: March 7th, 2022, 11:39 pm
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.

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.
I think you raise a good point here as to why stores in CA are smaller. Customers do larger trips at stores like Costco, then only do small dry goods fill in trips/more perimeter at the conventional grocers. But Costco's fresh departments are strong, so I think they also impact the perimeter at the grocers as well.

But why did customers gravitate to Costco in the first place? If the conventional store took care of their needs, I think they would have stuck with the conventional stores to a greater extent. I think these conventional stores priced themself out in California. It really started with awful pricing at Albertsons in 1999, and Safeway soon followed. Ralphs was always an expensive store but the difference is they seemed to be a bit more upscale than they currently present as at least from an operational perspective (the product mix at Ralphs still seems a bit more upscale).

So now you have an operator like Raleys with this thread that had larger than average stores catering to upper middle class consumers. Costco also caters heavily to upper middle class consumers, especially families who tend to be big spenders on food. If those customers switch more and more grocery purchasing to Costco, suddenly that 65,000 square foot grocery store is no longer getting the basket sizes it needs to be viable. So then that store ends up emptying out a lot of space, downsizing, or even closes as a result of the customers shifting a significant portion of purchases to Costco.

However one argument I would also make is I think the strength of Costco in California has perhaps also resulted in certain other retailers being less dominant in the state than they may otherwise be (Wal Mart and Sam's Club come to mind).
veteran+
Valued Contributor
Valued Contributor
Posts: 2233
Joined: January 3rd, 2015, 7:53 am
Has thanked: 1202 times
Been thanked: 71 times
Status: Offline

Re: Raley's to buy Arizona chain Bashas'

Post by veteran+ »

ClownLoach wrote: March 7th, 2022, 11:12 pm
storewanderer wrote: March 7th, 2022, 10:30 pm
pseudo3d wrote: March 7th, 2022, 8:17 am

Have you seen how long Safeway/Vons takes to do any sort of store rebuilds in California? It's not like in Texas, where they can close a store, knock it down, and build a new one within a year, the back-n-forths in California (especially S.F. and upscale parts around LA) take like 5 years.
The land value situation is complicating this further as you see more and more store sites being repurposed into apartments combined with retail, or efforts to make such a development. Highest and best use of land certainly rules and the developers know this and are willing to spend the years to get it right (well, it is a matter of opinion what is right)- or should we say, get the development in place that will make the developers the most money.

I think there is also less motivation by the retailer to do speedy redevelopments in California because typically they are going to "own" the neighborhood no matter what they do. It isn't like they are in a rush to get a larger/better store up, because of competition that has already been approved and is about to show up nearby. Their motivation to get a larger/better store up is basically a slam dunk decision for them to replace an aging facility/aging equipment, demolish or shift the position of their store so the site can be repurposed into other uses and the site more productive from a real estate standpoint, or invest in their facility as a defensive move to keep a competitor from ever getting approved to come in nearby.
One word: earthquakes.

Seismic requirements are not a California government "thing" but a requirement for insurance. In Texas you can build a cinder block or pre-poured concrete tilt up in a few months. You just attach the walls and roof to a stable concrete base.

In California due to liquefaction the first step becomes pounding metal or concrete core pilings up to 100 feet into the ground depending on how far you must go to reach solid bedrock. That alone is a year. Then every aspect of the wall construction must be heavily reinforced and woven with rebar. Walls and roof beams both must be heavily load bearing. All must be thicker and heavier than material used elsewhere. Open ceiling stores are an easy comparison. If you look at a recent build on the West Coast (since now Oregon and Washington are considered even more earthquake risk than California) versus anything in the Midwest you'll see that the stores have twice as many columns and beams, and they're much heavier. This is why it costs at least double to build here. The government has nothing to do with it.

Thank you for rising above the "cursory" explanations that are so popular.

:-)
Retailuser
Cashier
Cashier
Posts: 89
Joined: March 1st, 2022, 9:04 pm
Location: Chandler AZ
Been thanked: 15 times
Status: Offline

Re: Raley's to buy Arizona chain Bashas'

Post by Retailuser »

Drove by the Bashas Corporate office in Chandler AZ and it still looks like there are people still working there (as of this morning).
jamcool
Store Manager
Store Manager
Posts: 1019
Joined: March 5th, 2009, 10:27 pm
Been thanked: 50 times
Status: Offline

Re: Raley's to buy Arizona chain Bashas'

Post by jamcool »

Why wouldn’t there be? Bashas’ is a separate subsidiary of Raley’s, has its own warehouse, trucks, marketing.
Post Reply