Albertsons announces strategic review of company

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storewanderer
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Re: Albertsons announces strategic review of company

Post by storewanderer »

pseudo3d wrote: March 5th, 2022, 9:10 pm

A lot of the United stores are small too. I think their "largest" (regular) United Supermarkets store opened last year, and that's just around 63k square feet. Most of their stores are around that size (particularly ones they took over from Albertsons) or smaller, like the Lawrence Bros. stores. And with H-E-B already making their moves in D-FW and Lubbock, the importance of United as an acquisition target by H-E-B is not as big as it is as it was a decade ago or so when Albertsons first bought it.

I don't know the numbers of the Southern Division, but if they wanted it off the books the numbers of the stores, especially in Houston and Austin, are few enough that they can continue to whittle away the stores without scaring investors by bumping off the whole division.

And besides, the other thing to keep in mind is that Amazon's purchase of WFM was what really spooked Albertsons into "investing in technology" or whatever, and with this unstoppable Amazon grocery juggernaut not happening--the Amazon Fresh stores and Amazon Go stores a fraction of what was initially predicted (by Amazon and by analysts), and not particularly well-run either, maybe the strategic review is to pump the brakes on Sankaran's tech investments and actually focus on cultivating the stores, which have somewhat fallen into disrepair. One can only hope.
I think the strategic review may be to go even further down the path on the tech investments. They have a video feed that plays as you stand in line at the new Safeway in Reno. Huge flat screens against the front wall, the display must be 10 feet tall by about 6 feet wide. At first it played videos of private label products, clips about produce, etc. Recently they have flipped it to a bunch of videos of a robotic/automated fulfillment center and how they are investing so much in technology to bolster their e-commerce operation.

The problem I have with the e-commerce operation of Safeway is this: the prices are too high. The prices are much higher than Wal Mart or Kroger. Why would anyone use Safeway's e-commerce if they had another lower priced option nearby? Given I get multiple offers out of Safeway for things like $30 off $75 Drive Up and Go Order, they seem to know they are (way) overpriced too... Then you have services like Instacart that will go do a shop for you at WinCo (or Wal Mart, or Smiths, Costco, or Sprouts) and deliver it to your house and those stores prices are so much lower even with added fees you would come out ahead and get it delivered.

Unfortunately I think online grocery is a race to the bottom. The leading players all play on price. It is a money losing proposition.
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Re: Albertsons announces strategic review of company

Post by HCal »

storewanderer wrote: March 5th, 2022, 9:26 pm The problem I have with the e-commerce operation of Safeway is this: the prices are too high. The prices are much higher than Wal Mart or Kroger. Why would anyone use Safeway's e-commerce if they had another lower priced option nearby? Given I get multiple offers out of Safeway for things like $30 off $75 Drive Up and Go Order, they seem to know they are (way) overpriced too... Then you have services like Instacart that will go do a shop for you at WinCo (or Wal Mart, or Smiths, Costco, or Sprouts) and deliver it to your house and those stores prices are so much lower even with added fees you would come out ahead and get it delivered.

Unfortunately I think online grocery is a race to the bottom. The leading players all play on price. It is a money losing proposition.
Back when Safeway used to deliver groceries themselves, I think some people were willing to pay a bit more. They would deliver using vans that had refrigeration and freezer sections, and as Safeway employees they were more professional.

Now that Albertsons management has decided to farm it out to third party gig drivers, the quality has gone way down. Might as well use Instacart or Walmart at this point.
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Re: Albertsons announces strategic review of company

Post by Alpha8472 »

I used the Safeway delivery service for my workplace years ago. It was very good at the time. The delivery driver brought the groceries into the office building and restocked our fridge for us. We did not have to do any work at all.

Amazon seems to be stalling on expanding their own grocery stores. What if Albertsons is in a deal to sell off their stores to Amazon?

Why waste money on building new stores from scratch when you can buy stores that are fully stocked and ready to go? Albertsons is looking to sell itself to someone with money.
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Re: Albertsons announces strategic review of company

Post by storewanderer »

Alpha8472 wrote: March 6th, 2022, 10:34 am I used the Safeway delivery service for my workplace years ago. It was very good at the time. The delivery driver brought the groceries into the office building and restocked our fridge for us. We did not have to do any work at all.

Amazon seems to be stalling on expanding their own grocery stores. What if Albertsons is in a deal to sell off their stores to Amazon?

Why waste money on building new stores from scratch when you can buy stores that are fully stocked and ready to go? Albertsons is looking to sell itself to someone with money.
Does Amazon want the unionized workforce that would come with Albertsons?
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Re: Albertsons announces strategic review of company

Post by storewanderer »

HCal wrote: March 6th, 2022, 1:01 am

Back when Safeway used to deliver groceries themselves, I think some people were willing to pay a bit more. They would deliver using vans that had refrigeration and freezer sections, and as Safeway employees they were more professional.

Now that Albertsons management has decided to farm it out to third party gig drivers, the quality has gone way down. Might as well use Instacart or Walmart at this point.
I think they still have some Safeway vans running in the Bay Area. The Union had something in the contract/agreement that made it so they could not completely shut down the operation attached to certain store locations.

I am waiting for some health departments to come out against this practice of delivery services that bring refrigerated/frozen foods that are not stored in refrigeration/freezer vehicles during transport. I won't hold my breath on that happening because it seems like nobody cares anymore.

There are reasons those Safeway vans had the frozen/refrigerated component, it was to ensure items were at correct temperature during transport (so nobody got sick).

The store's obligation to the consumer ends when the consumer takes possession of the goods. So if I go to the physical store and take refrigerated/frozen items from the store and transport them home in the car trunk that is on me they were not kept at temperature. But with these delivery services I believe this expands the store's obligation to the point the consumer receives the product (hence why using a third party I guess relieves them of that obligation).
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Re: Albertsons announces strategic review of company

Post by Brian Lutz »

I still see Safeway trucks doing delivery in this area, but even in store Safeway's prices are so high that I would have to imagine that adding delivery fees on top of that would make getting Safeway delivery a very expensive proposition.
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Re: Albertsons announces strategic review of company

Post by Alpha8472 »

Safeway delivery was always a rip off. The company I worked for had too much money. The engineers got a refrigerator filled with free food and drinks to snack on all day.

Many tech companies in the San Francisco Bay Area use Safeway because Safeway restocks the refrigerators. The rich Tech companies keep Safeway Delivery in business in this area. In areas where there are fewer tech companies, Safeway probably does not make much on deliveries.

Ordering on the Safeway website is designed so that you end up buying the most expensive stuff. Trying to hunt for deals is very difficult. The large pack of yogurt may be more expensive than buying the individual cups. Trying to add Safeway For You deals is a complicated process that most people don't even bother with.
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Re: Albertsons announces strategic review of company

Post by storewanderer »

Alpha8472 wrote: March 6th, 2022, 7:01 pm Safeway delivery was always a rip off. The company I worked for had too much money. The engineers got a refrigerator filled with free food and drinks to snack on all day.

Many tech companies in the San Francisco Bay Area use Safeway because Safeway restocks the refrigerators. The rich Tech companies keep Safeway Delivery in business in this area. In areas where there are fewer tech companies, Safeway probably does not make much on deliveries.

Ordering on the Safeway website is designed so that you end up buying the most expensive stuff. Trying to hunt for deals is very difficult. The large pack of yogurt may be more expensive than buying the individual cups. Trying to add Safeway For You deals is a complicated process that most people don't even bother with.
And really, that is the only way a grocery delivery service can even make money at all. It has to be a premium service. Everything you describe from displaying more expensive products (why push delivery of 59 cent cups of Lucerne Yogurt) to the great service of the driver stocking the items in the refrigerator is a clear example of getting what you pay for. Grocery is simply too low margin and just too many item counts for it to be any other way. Plus to be full service and do liquor delivery the driver needed to verify customer ID for age, etc. Not as simple as mailing someone a box of clothes or books.

Safeway's website (pre Albertsons) basically priced up everything by .10 per dollar. As in the .49 item in the store was .59 online; the 4.99 item was 5.39 online; the 9.99 item was 10.89 online. Plus there was a delivery fee. Initially Safeway.com was in-store pricing and added on the delivery fee. They shifted to that different pricing model since even with their outrageous prices to begin with plus a delivery fee it really did cost "that much" to fulfill online orders so they had to add to the product prices to even come close to profitability.

The website did/does participate in all advertised specials at the advertised prices with the club card, however as you point out, you had to go clip coupons to get the best prices in the advertisement to apply. The updated Albertsons website shows coupons right on the product page and you can click clip at the same time as you are adding a product. It was more cryptic with Safeway. Also, Albertsons has discontinued this practice of different pricing and at this point the store pricing is the same as the online pricing (in a few cases I notice their online pricing is lower; I think sometimes when they push a price increase the stores get the increase a few days before the online does).
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Re: Albertsons announces strategic review of company

Post by ClownLoach »

Alpha8472 wrote: March 6th, 2022, 10:34 am I used the Safeway delivery service for my workplace years ago. It was very good at the time. The delivery driver brought the groceries into the office building and restocked our fridge for us. We did not have to do any work at all.

Amazon seems to be stalling on expanding their own grocery stores. What if Albertsons is in a deal to sell off their stores to Amazon?

Why waste money on building new stores from scratch when you can buy stores that are fully stocked and ready to go? Albertsons is looking to sell itself to someone with money.
The strategic review specifically is to grow the Albertsons Companies per their press release. Not sell and close it. Remember that making an announcement like this is a one way street, you can't take it back because it would be considered stock manipulation by the SEC who would lock up the executives on the spot.
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Re: Albertsons announces strategic review of company

Post by storewanderer »

ClownLoach wrote: March 6th, 2022, 10:13 pm

The strategic review specifically is to grow the Albertsons Companies per their press release. Not sell and close it. Remember that making an announcement like this is a one way street, you can't take it back because it would be considered stock manipulation by the SEC who would lock up the executives on the spot.
There is a disclaimer in the announcement that nothing may come of their review...

Standard language to cover, that is common in all of the "strategic review" releases.
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