SpinCo

This is the place for general and miscellaneous posts on topics which might extend past the boundaries of any specific region. No non-grocery posts.
Bagels
Assistant Store Manager
Assistant Store Manager
Posts: 823
Joined: August 20th, 2018, 11:54 pm
Has thanked: 1 time
Been thanked: 12 times
Status: Offline

Re: SpinCo

Post by Bagels »

I'm curious what your fascination with Loblaws is :)? Canadian grocery prices have been historically high; even with the crappy exchange rate, many Candians living near the border regularly shop across it.
VibeGuy
Cashier
Cashier
Posts: 97
Joined: January 19th, 2010, 2:47 pm
Has thanked: 1 time
Been thanked: 3 times
Status: Offline

Re: SpinCo

Post by VibeGuy »

The competitive landscape has definitely changed since any of the Loblaw attempts in the US.

Speaking only for myself (who absolutely does not think Loblaw should come any further south than Ashland, OR, under any of the current circumstances), I’m a fan for several reasons:

1) The absolute best house brand program, historically and today. There’s a number of categories I stock up on at Superstore because PC is superior or No Name is dramatically cheaper. Amazon and TJs both do well with Aplenty and their house marques, but Loblaw is both consistently excellent and has breadth and depth. I especially like that they do seasonal flankers like the Summer Cheesecake Assortment and the rotating diet soda/sparkling water flavors. It’s possible you haven’t had a PC Loads of All-Dressed ridged potato chip. Pity.

2) They’re very aggressive with GM and HBA pricing and they do clever merchandising stuff, like the single-noodle-wide lasagna bakers and the cake plate specifically sized to fit the aforementioned PC cheesecake. I like the sense that I’m going to see something fun and different every time I’m at superstore, which rarely happens anymore at Fred Meyer. They’re right there with Costco in the “discovery” experience. They’re also consistently cheaper than WM USA (after exchange and accounting for sales tax) on national-brand HBA like L’Oréal, somehow.

3) Their in-store bake-off products are better than the PNW competition.

4) They are EDLP-obsessed.

5) Their assortment in center store seems to be the most varied by neighborhood of anybody in North America. I can practically tell the difference between Richmond, Surrey and Downtown Vancouver locations blindfolded.

6) I like how they run Wholesale Club, with their deeper selection of smallwares and more breadth/depth in c-store and food service, relative to Chefstore/SmartFoodservice/Cash and Carry, Smart & Final or center store at Costco Business.

7) T&T is unbeatable in Asian grocery.

What I don’t like:

A) I’m least impressed by their meat, seafood and deli in the Superstore format. Not Super.

B) I find floor staffing painfully thin during the day and evening. Good luck finding something at a new location or after a reset.

C) I wish the lighting was brighter in the parkades if they’re under the store.

D) Post-COVID, bulk is pre-portioned and not nearly as broad nor deep.

My general sense of the players with the scale to pick up PNW Safeway, domestic or international, operators or PE, they’re top tier. The only three domestic operators I’d want would be Publix, Hy-Vee and HEB, and 200 stores in the PNW shouldn’t be attractive to any of them.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: SpinCo

Post by storewanderer »

Bagels wrote: November 4th, 2022, 8:13 pm I'm curious what your fascination with Loblaws is :)? Canadian grocery prices have been historically high; even with the crappy exchange rate, many Candians living near the border regularly shop across it.
I'm going to reply here before reading the post of VibeGuy:

Loblaw runs an excellent store. Every Loblaw store I've ever been into regardless of format is clean, orderly, well stocked, and well staffed. Not always the friendliest, but they have a lot of self checkouts, so who cares. I've been to various of their formats: Superstore, Loblaws, Wholesale Club, No Frills, "Independent," Extra Foods, T&T, Shoppers Drug Mart...

The central strong point of all of Loblaws operations (except T&T) is the President's Choice Brand. This product line is simply excellent; packages "pop," mix is strong, pricing is strong, quality is really really good.

Their upscale format (see Loblaws in North Vancouver) has a fantastic perimeter and atmosphere. This is the only one of their stores I've been in where I saw any real effort on perimeter/prepared foods/upscale presentation and they did an excellent job.
Their wholesale club is more of a restaurant supply house and is very well assorted on kitchen gadget type items in addition to food.
Superstore is a great format; great packaged food mix and nice large produce departments; a bit less on fresh bakery/deli type items or meat though.
No Frills does exactly what it says it does- prices are very strong, mix is great, stores are nice and easy to shop. I envision Grocery Outlet evolving into a format like No Frills once they grow too big to do their current closeout format.

With regards to your comment about Canadians crossing the border to shop, for non food yes that is very common just for a change of scenery/access to different products but on groceries, that is really only for certain grocery products. Certain ethnic items are more readily available in the US than Canada (notably latin items but even some stuff like Italian items too). A number of items cost less in the US than Canada due to farm subsidies; notably many dairy products. Also some meats. There are some laws that certain items from those categories are not supposed to cross the border back into Canada to protect Canadian suppliers but I am not sure how much that is enforced.

On packaged foods I have found the prices in Canada to be similar to or lower than the US after factoring in the exchange rate when shopping promotions specifically across multiple of the Loblaw formats.
buckguy
Store Manager
Store Manager
Posts: 1003
Joined: January 31st, 2017, 10:54 am
Has thanked: 3 times
Been thanked: 61 times
Status: Offline

Re: SpinCo

Post by buckguy »

Competitive conditions may have changed in the US but the various Weston family companies (Loblaw is only one of them, they own others or control them through an investment company) do not seem to have any investments in the US and the various operations have been in more of a divesture than acquisition mode. They have mostly cashed out of food processing, which is a low margin business with too much capacity and made more investments in high end retail. Loblaw was lucky to have their major competition in Canada be mismanaged and they still have had to remake themselves. I would guess that they'd be cautious about re-entering the US and without a lot of manufacturing assets to support, they have less reason to do so. They're heavily invested in the UK and may want to diversify out of that, but continental Europe might serve their purpose better than the US and they already have retail holdings (department stores) there.

Re: Kroger potential in the East. They might get more sales out of Acme with better pricing, but Kroger's classic problem is strong local competition. Shop-Rite will beat them and so will Giant-PA---they know the market. Stop & Shop is retreating from NJ for the second time, but Acme has never done as well in northern NJ as they have elsewhere and closed a great many stores there before they bought the A&Ps. In the long run, they seem unlikely to regain market dominance. Acme benefited from the mismanagement of Food Fair and Penn Fruit and having profitable California stores to subsidize a price war in Philly and establish a couple decades of dominance there. Kroger will be hobbled with debt and face strong competition, so price wars (which they usually avoid) are unlikely.
rwsandiego
Store Manager
Store Manager
Posts: 1242
Joined: April 3rd, 2016, 10:57 pm
Has thanked: 23 times
Been thanked: 55 times
Status: Offline

Re: SpinCo

Post by rwsandiego »

Loblaw failed in the US a long, long time ago with National. Their newer stores were OK, but Kroger and Jewel killed them in St Louis and Chicago, respectively. I don't see them trying again.

Fun fact: Jewel's brick-and-mortar operation got its start thanks to Loblaw's first failure in the US. Jewel Tea Company diversified away from route sales by buying Loblaw's operation in Chicago back in the 1930's.
marketreportblog
Receiving Clerk
Receiving Clerk
Posts: 147
Joined: July 9th, 2021, 7:40 pm
Location: New Jersey / New York
Has thanked: 87 times
Been thanked: 50 times
Contact:
Status: Offline

Re: SpinCo

Post by marketreportblog »

buckguy wrote: November 5th, 2022, 6:02 am Re: Kroger potential in the East. They might get more sales out of Acme with better pricing, but Kroger's classic problem is strong local competition. Shop-Rite will beat them and so will Giant-PA---they know the market. Stop & Shop is retreating from NJ for the second time, but Acme has never done as well in northern NJ as they have elsewhere and closed a great many stores there before they bought the A&Ps. In the long run, they seem unlikely to regain market dominance. Acme benefited from the mismanagement of Food Fair and Penn Fruit and having profitable California stores to subsidize a price war in Philly and establish a couple decades of dominance there. Kroger will be hobbled with debt and face strong competition, so price wars (which they usually avoid) are unlikely.
But I think it's not impossible that Kroger could establish ACME as a solid #2 in New Jersey. Remember that about half of ACME's stores are in NJ and about 2/3 are in NJ, NY, and CT. Kroger would also have the resources to expand ACME further into NY and CT... maybe even someday attempting to close the gap between ACME and Shaw's, since it's not ALL that far. Kroger would do better against Stop & Shop in CT than Supervalu did. And while I don't see Stop & Shop leaving NJ/NYC completely anytime soon, they're obviously retreating significantly despite the remodeling. That leaves a significant gap that a stronger ACME could easily jump into. Meanwhile, ACME seems to be retreating a bit (although not too much, most of the damage has already been done) from their home location of Pennsylvania. There's growth potential there, but ACME doesn't seem too excited about it right now.
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: SpinCo

Post by Romr123 »

Canadian-sourced All-Dressed potato chips are available at Winn-Dixie (of all places) in their premium private-label collection...have never seen them anywhere else except for New England (where Humpty Dumpty from New Brunswick seem to be a bargain brand).

You synopsized Loblaws very well---living in Detroit we often swing through Superstore in Windsor before heading home. There is a coherence to their selection that is nice to visit. I'd agree that in-store bakery isn't a strength for them, but center store is terrific. (Loblaws branded stores don't extend past London, Ontario--Zehr's is the nameplate for traditional Loblaw-owned supermarkets in western Ontario).

US and Canada produce trucks cross over in both directions between Detroit and Windsor--most of our greenhouse tomatoes and cucumbers in MIchigan come from Windsor/Leamington.

In Toronto, the Maple Leaf Gardens Loblaws is amazing, with superb perimeter and complete center store. Very analogous to a good Wegmans'.

Supermarket Pricing is a macroeconomic/subsidy issue between US/Canada...like-for-like processed items taking out exchange rates are within 10% on either side of the border. Meat/dairy higher in Canada; sugar/confectionery higher in US. Promo prices on HBA/home chemicals are identical to 5% lower in Canada (small Tide/Persil between $4 and $5 USD/CAD at US drug stores/Shoppers).

One funny pricing discrepancy--turkeys are 1/2 the price in the US as Canada. CBSA (customs) rules are that exactly two frozen turkeys (only) can be brought US to CAN. One holiday season 15 years or so ago I was asked by a friend to bring a couple turkeys across--researched it at the time on the website.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: SpinCo

Post by storewanderer »

VibeGuy wrote: November 4th, 2022, 9:43 pm

What I don’t like:

A) I’m least impressed by their meat, seafood and deli in the Superstore format. Not Super.

B) I find floor staffing painfully thin during the day and evening. Good luck finding something at a new location or after a reset.

C) I wish the lighting was brighter in the parkades if they’re under the store.

D) Post-COVID, bulk is pre-portioned and not nearly as broad nor deep.

My general sense of the players with the scale to pick up PNW Safeway, domestic or international, operators or PE, they’re top tier. The only three domestic operators I’d want would be Publix, Hy-Vee and HEB, and 200 stores in the PNW shouldn’t be attractive to any of them.
You're more excited about T&T than I am, but yes T&T is very good. T&T could absolutely be a format that would work and be profitable in the US. But there are some very good Asian grocers in the US too- at some locations- 99 Ranch, H Mart, do have some really good stores, and some that are really not good. Seafood City runs a consistently clean store and seems more consistent from location to location than these others are operationally but mix is an issue there, too Americanized.

Publix is a non-starter for anything here because they are non-Union. The government and these AGs will absolutely ensure they do not get these stores. The stores are too small for Hy-Vee and HEB.

I just wonder if Loblaws would want the PNW Safeway. When you look at what Loblaws does around Vancouver, they basically do everything BUT operate standard garden variety conventional grocery stores. They have the Superstores, they have the No Frills, they have the single Wholesale Club, they have the many Shoppers Drug Marts... they have the one Loblaw upscale store, they have a few independent 30k square foot stores they supply, but they don't run garden variety 50k square foot conventional stores. And that is exactly what PNW Safeway is... so I wonder, is Loblaw even interested in running just that format in a market? I feel like Loblaw's strategy is all of these different formats to capture different customers and while it doesn't directly compete with the Safeway in Canada, it pokes it from every angle, if you get what I mean.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: SpinCo

Post by storewanderer »

buckguy wrote: November 5th, 2022, 6:02 am

Re: Kroger potential in the East. They might get more sales out of Acme with better pricing, but Kroger's classic problem is strong local competition. Shop-Rite will beat them and so will Giant-PA---they know the market. Stop & Shop is retreating from NJ for the second time, but Acme has never done as well in northern NJ as they have elsewhere and closed a great many stores there before they bought the A&Ps. In the long run, they seem unlikely to regain market dominance. Acme benefited from the mismanagement of Food Fair and Penn Fruit and having profitable California stores to subsidize a price war in Philly and establish a couple decades of dominance there. Kroger will be hobbled with debt and face strong competition, so price wars (which they usually avoid) are unlikely.
I'm in full agreement with you here. I think Kroger is going to have significant problems with the Acme/Shaw's operation. If I were them, I would not even buy it. It does not fit Kroger and there is too much better local competition. Acme/Shaw's are so behind the curve, have substandard stores, they will never catch up. My other concern is the few things Acme does sort of well (their perimeter isn't bad and their center store mix depth is good) are things Kroger is painfully weak at...

I am also not entirely sure if the wide private label mix of Kroger is going to be a strength or weakness on the US East Coast/Northeast. I get the feeling brands are more important in those markets, especially regional brands... this is another area where Acme/Shaw's are much different than the typical Safeway (a chain who is terrible at allocations and pricing on regional brands/regional items) and it is most striking when you walk a Mid Atlantic Safeway then walk an Acme up in DE an hour later...

This is nothing like Roundys Pick N Save that practically had a monopoly position in many parts of WI with nice big stores and was just broken operationally and in financial distress.
VibeGuy
Cashier
Cashier
Posts: 97
Joined: January 19th, 2010, 2:47 pm
Has thanked: 1 time
Been thanked: 3 times
Status: Offline

Re: SpinCo

Post by VibeGuy »

RE:Asian markets
The other big Asian operators are so wildly variable relative to the consistent execution at T&T. I love H-Mart but they are operator dependent to a shocking degree. Same at 99 Ranch - anything from sketchy to excellent. Seafood City, I can’t speak to inter-store consistency but I generally prefer a Chinese, Korean or Japanese mix (see also Uwajimaya).

RE: Loblaw format gap / City Market
Loblaw actually has three Lower Mainland stores like the one in North Van (I’m assuming you’re referring to the City Market on North Lonsdale) - there’s another over at Park Royal, and then one kind of off Broadway and Arbutus. If you dropped any of those format into similar Seattle or Portland neighborhoods they’d succeed.

If you took the average PNW Safeway and swapped out PC for their house brands, you’re right, there wouldn’t be a Loblaw perfect match in Western Canada, but there’s nothing so exotic about the format or scale that Loblaw would be likely to screw it up.

Re: Loblaw/Weston in the US
Weston has admittedly fled the US (at a profit, I might add) but I don’t think a geographically contiguous store group would be an operational burden, and I think the Loblaw operations can be seen as distinct from the capital-intensive baking and food processing businesses. Compared to the prior ventures (other than Detroit), there’s been a lot of geography between their core business and the US islands. With the kind of divests at stake in the PNW, the distance between the southernmost stores and DC in the Lower Mainland and the closest acquired stores would be shorter than the distance to the Victoria/Vancouver Island sites. Throw in the dairy manufacturing assets from the divest to address the quirks of running a transborder dairy business, rely on NAFTA and modern customs brokerage to keep your supply chain fluid and you may have a winner.

Oh, and from earlier, I’d be thrilled to have Wegman’s. Since geography doesn’t matter in Fantasy Grocery.

FWIW, I think any objection to a non-union operator would be thoroughly squelched by a well-capitalized ESOP.
Post Reply