Albertsons announces strategic review of company

[ClownLoach]

More information on the review & fiscal year 2021 in this article https://www.supermarketnews.com/retail- ... f37&sp_eh=

I think it is worth noting if you have read the article that Albertsons results are now considered to be consistently better (year and recent quarters) than Kroger. But Wall Street is not giving them appropriate credit. They are just fine financially and rock solid (as I said before when I read the baffling comments that seem to think a company doing tens of billions of dollars in sales is somehow going to crash land in the US Bankruptcy Court) and do allude to the idea that more technology investment will improve the company's value. Makes me think even more about an Amazon transaction still in construction.

[storewanderer]

I think it is worth noting if you have read the article that Albertsons results are now considered to be consistently better (year and recent quarters) than Kroger. But Wall Street is not giving them appropriate credit. They are just fine financially and rock solid (as I said before when I read the baffling comments that seem to think a company doing tens of billions of dollars in sales is somehow going to crash land in the US Bankruptcy Court) and do allude to the idea that more technology investment will improve the company's value. Makes me think even more about an Amazon transaction still in construction.

The structure of the stock is a bit strange; Cerberus still has control over the company. This is probably a part of why Wall Street is valuing the company the way it is.

Also I still think Kroger is a much more productive operator despite various missteps Kroger has made in the past few years. Buffett is invested in Kroger as well.

Pricing continues to be a big huge giant problem with Albertsons and private label growth sounds a bit odd when they say the growth came from departments like deli and meat (are they counting all of the items in those areas as private label?). I remember how Safeway used to say they had higher bakery sales than any other grocer- what they didn't say was that was because they considered prepack bread (Wonder, Oroweat, etc.) as part of bakery department/counted as bakery sales whereas other chains consider that stuff part of grocery department. Also it doesn't seem like they do much with the loyalty card data. Overall I do think Albertsons operation is much better now than it was a few years ago but they still are stuck in a lot of Safeway's very bad ways and they need to shed those.

[pseudo3d]

More information on the review & fiscal year 2021 in this article https://www.supermarketnews.com/retail- ... f37&sp_eh=

I think it is worth noting if you have read the article that Albertsons results are now considered to be consistently better (year and recent quarters) than Kroger. But Wall Street is not giving them appropriate credit. They are just fine financially and rock solid (as I said before when I read the baffling comments that seem to think a company doing tens of billions of dollars in sales is somehow going to crash land in the US Bankruptcy Court) and do allude to the idea that more technology investment will improve the company's value. Makes me think even more about an Amazon transaction still in construction.

Echoing storewanderer, despite whatever Kroger has mishandled in recent years, the chain has been building on a few decades of stability. If you compare the last two decades, Albertsons has bungled acquisitions, lost huge swaths of stores, screwed its own brand names, and ended up with a patchwork of different markets and brands, a good number of them a second-class name with their glory days behind them. Meanwhile, on a macro level, Kroger has continued to expand its influence with strategic acquisitions and established itself not only with high sales and ability to compete with whatever "homegrown" competition is thrown at them, but also as a low-price leader. There have been a few markets Kroger has quietly left but nothing on the scale of Albertsons.

[Endecker]

I work at Safeway in DC. I know that the team at the Lancaster warehouse were just majorly downsized and that the VP of the Safeway banner stores in the mid Atlantic gave no notice and quit within the last 2 weeks.

[pseudo3d]

I work at Safeway in DC. I know that the team at the Lancaster warehouse were just majorly downsized and that the VP of the Safeway banner stores in the mid Atlantic gave no notice and quit within the last 2 weeks.

For a single post poster, that's a pretty big claim...and seeing as how they did add two Safeway stores in 2021 via acquisition (not to mention the whole Balducci's/Kings thing), I'd be surprised Mid-Atlantic is at serious risk. I've heard some pretty crazy rumors about Randalls in the last year or so before the Albertsons takeover, like the imminent closure (or if it already closed) of the Houston offices (they ended up staying until the Houston Division was merged about five years later), or even Fiesta taking over the Shepherd/Westheimer store (it did not, and also spent another five years under Albertsons before closing to become a Target).

Anyway, there was an article where Sankaran wanted to see more "loyalty" in the business transformation. While I hope this means beyond reward programs and other gimmicks and actually building a good, solid reputation, it also indicates that they're playing for keeps and won't get rid of divisions unless absolutely necessary.

And as for loyalty, the poor reputation, market pullouts, and later mergers have undermined their core name of Albertsons. There are very few markets with that name exclusively, everything else either shares names with the Safeway brand (including Vons or Tom Thumb), has been eliminated, or has pulled out a long time ago. Kroger has stores full of their name in much of the eastern United States (except for a few markets, like Mariano's, Harris Teeter, or JayC). Albertsons doesn't even have a generics line with its name, using "Signature Select" instead of their own (almost every grocer everywhere else, except for small independents and a few others, uses their own name as a brand).

[HCal]

And as for loyalty, the poor reputation, market pullouts, and later mergers have undermined their core name of Albertsons. There are very few markets with that name exclusively, everything else either shares names with the Safeway brand (including Vons or Tom Thumb), has been eliminated, or has pulled out a long time ago. Kroger has stores full of their name in much of the eastern United States (except for a few markets, like Mariano's, Harris Teeter, or JayC). Albertsons doesn't even have a generics line with its name, using "Signature Select" instead of their own (almost every grocer everywhere else, except for small independents and a few others, uses their own name as a brand).

I have no idea why they chose Albertsons as their "core name". At the time of the merger, Safeway was a much bigger company than Albertsons. There are far more stores under the Safeway banner than the Albertsons banner, and the IT and house brands all came from the Safeway side. The Albertsons name is tarnished in many regions, including California which is by far their largest market. People in Norcal remember Albertsons and how it failed and disappeared, so I doubt an "Albertsons" line of generics would go over well.

Many companies don't use their own name for private label products. Walmart has Great Value, Costco has Kirkland, Save Mart has Sunny Select, and so on. I get the impression that Albertsons wants to be a collection of chains rather than a centralized business like Kroger, so imposing the Albertsons (or Safeway) name on the other banners would take away from that "hometown grocer" feel they are going for.

[storewanderer]

I have no idea why they chose Albertsons as their "core name".

One word- pride.

To be fair, the Albertsons led by Bob Miller was a very different company than the Albertsons that was run into the ground in the late 90's and early to mid 00's. They were a true comeback kid and proud of it. So they used their name for the company.

[Alpha8472]

Instead of Albertsway, Safewaysons, Jewel-Acme, Savon-Carrs...

[HCal]

One word- pride.

To be fair, the Albertsons led by Bob Miller was a very different company than the Albertsons that was run into the ground in the late 90's and early to mid 00's. They were a true comeback kid and proud of it. So they used their name for the company.

Did they really make a comeback, or did they just manage to survive until their owners bought a bigger and more successful chain to merge them with?

[storewanderer]

One word- pride.

To be fair, the Albertsons led by Bob Miller was a very different company than the Albertsons that was run into the ground in the late 90's and early to mid 00's. They were a true comeback kid and proud of it. So they used their name for the company.

Did they really make a comeback, or did they just manage to survive until their owners bought a bigger and more successful chain to merge them with?

I'd call it a comeback. The veteran grocers in Albertsons management got control over the combined company, though initially there were some Safeway executives there, the Safeway people were not around long.

Had the Albertsons LLC not performed well enough with those 200 AZ/CO/NM/TX/FL stores for Cerberus to convince them to keep them as a going concern for so much longer than Cerberus typically keeps things going, the company would have been gone. "Albertsons" would not have been there to buy Supervalu or Safeway assets. Cerberus could have still done a deal of course, but Boise wouldn't have been there to manage it. Cerberus also could have done a slice and dice to both Supervalu Albertsons and to Safeway but they have not really done that. Sure they've done some shedding of assets but nothing like how they went from 700 stores to 200 stores in a 2-3 year period back in 2008-2011 and most of it was closures (only sales of operating stores as a going concern were NorCal and the random OK/FL store sales about 175 stores sold total).