Southeast Grocers Exploring Sale

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Southeast Grocers Exploring Sale

Post by arizonaguy »

Seems like this would be a better fit for Kroger than Albertsons. It also would be a better fit for Albertsons than Kroger.

https://www.jaxdailyrecord.com/article/ ... HgRA8mccIQ
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Re: Southeast Grocers Exploring Sale

Post by pseudo3d »

Lone Star Funds has stuck with SEG for a long time with two bankruptcies. Why now?

If they had done this just a few months earlier and dangled Winn-Dixie in front of Kroger's face they might've still taken the bait! Kroger has eyed WD on and off over the years, and battled them in numerous markets (usually winning), including a battle on their own turf (WD's Thriftway chain).

SEG has already lost BI-LO, and even if Albertsons makes it out of the Kroger merger with most of their skin intact, AlberSEG would be a weird combination at best, a chain assembled out of parts that many years ago were all strong, independent companies.

I haven't heard much of SEG lately, not much after they sold off BI-LO. I'm very curious as to how Fresco y Más is really doing for them. Most grocers do not have success with that type of format.
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Re: Southeast Grocers Exploring Sale

Post by storewanderer »

This would be an easier acquisition for Kroger than Albertsons, but I am suspicious the asking price is not going to reflect the distressed nature of the Southeastern Grocers assets.

Albertsons is not going to be acquiring anything, they are basically taking their last steps as a company and at this point the question is does it merge its entire operation into Kroger or does it break itself up into parts again like it did in 2006.

My guess is Lone Star Funds has decided grocery has reached a maximum multiple at this point. I just wonder- who would buy Southeastern Grocers?

Or could Lone Star be looking to exit Southeastern Grocers and instead invest in some Albertsons divests out west...?
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Re: Southeast Grocers Exploring Sale

Post by jipper »

A sale of SEG/Winn Dixie to another company is an interesting idea, but I wonder if their history would be a major roadblock for potential buyers. I have lived in Winn Dixie territory and shopped in their stores, on and off, for the past 38 years. Here are my observations.

The Winn Dixie stores of old, at least in my area were known for:
  • stores that were somewhere between semi-clean to filthy; one even stunk of mold
  • outdated equipment, decor and lighting
  • some employees who considered their job a contest to see who could be rudest to customers
  • freshness of food that was, to say the least, often suspect.
  • sale items that were often out of stock
  • their prices got unreasonably high for a while
  • finally, bankruptcies
Later, W/D built these huge Winn Dixie Marketplace stores in the wrong places, so they had no customer base, it seemed.

The stores that I have visited recently have, without exception, friendly and polite help and the stores are generally clean. However,
  • the stores in my area are in dire need of updating
  • non-sale prices of everyday items tend to skew high, though the sales can be quite good
So, then the question is, can a sale of the company with a whole lot of baggage from the past be attractive to another operator? Probably for the right price.
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Re: Southeast Grocers Exploring Sale

Post by veteran+ »

My experience living in Florida mirrors your experience with Winn Dixie!
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Re: Southeast Grocers Exploring Sale

Post by pseudo3d »

storewanderer wrote: November 18th, 2022, 11:34 pm This would be an easier acquisition for Kroger than Albertsons, but I am suspicious the asking price is not going to reflect the distressed nature of the Southeastern Grocers assets.

Albertsons is not going to be acquiring anything, they are basically taking their last steps as a company and at this point the question is does it merge its entire operation into Kroger or does it break itself up into parts again like it did in 2006.

My guess is Lone Star Funds has decided grocery has reached a maximum multiple at this point. I just wonder- who would buy Southeastern Grocers?

Or could Lone Star be looking to exit Southeastern Grocers and instead invest in some Albertsons divests out west...?
SpinCo is not going to be a viable company unless it gets its own store names, which I have a feeling Kroger would rather not give up.

LSF investing in those moribund stores is far less likely than Albertsons surviving.
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Re: Southeast Grocers Exploring Sale

Post by Romr123 »

Have been in a few W-D over the last couple years--about all they had unique were some interesting private label items; otherwise a slightly better-than-expected deli and a meh bakery. Wasn't looking at meat/fish. Shopped there because Publix politics are odious.
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Re: Southeast Grocers Exploring Sale

Post by storewanderer »

Romr123 wrote: November 19th, 2022, 10:15 am Have been in a few W-D over the last couple years--about all they had unique were some interesting private label items; otherwise a slightly better-than-expected deli and a meh bakery. Wasn't looking at meat/fish. Shopped there because Publix politics are odious.
Winn Dixie has some items in center store that Publix does not have. They also run different types of promotions than Publix. In their busier stores their perimeters aren't bad. The biggest problem is they have far too many very low volume stores. These low volume stores have terrible perimeters and a very dead atmosphere. I know slowly they are shutting those down but it seems to be taking a long time.

They've had multiple remodel programs over the years that seem to vary in quality, but when they first roll out a remodel they put what feels like unlimited effort into it.

Publix is what Publix is. They are one of the few (only?) conventional grocers that has engaged in a successful multi-state expansion program in the past many decades that is still ongoing to this day. Other chains (like Albertsons) tried, and failed. Publix despite being Publix deserves credit for doing what many chains couldn't do. Harris Teeter I suppose also had a good run though failed in Atlanta and Nashville, but now it seems Kroger has largely played a Kroger and stopped building many new stores. But after I leave FL, I never come back and wish I had a Publix at home. Hy Vee, Meijer, Wegmans... different story.
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Re: Southeast Grocers Exploring Sale

Post by pseudo3d »

storewanderer wrote: November 19th, 2022, 10:45 pm
Romr123 wrote: November 19th, 2022, 10:15 am Have been in a few W-D over the last couple years--about all they had unique were some interesting private label items; otherwise a slightly better-than-expected deli and a meh bakery. Wasn't looking at meat/fish. Shopped there because Publix politics are odious.
Winn Dixie has some items in center store that Publix does not have. They also run different types of promotions than Publix. In their busier stores their perimeters aren't bad. The biggest problem is they have far too many very low volume stores. These low volume stores have terrible perimeters and a very dead atmosphere. I know slowly they are shutting those down but it seems to be taking a long time.

They've had multiple remodel programs over the years that seem to vary in quality, but when they first roll out a remodel they put what feels like unlimited effort into it.

Publix is what Publix is. They are one of the few (only?) conventional grocers that has engaged in a successful multi-state expansion program in the past many decades that is still ongoing to this day. Other chains (like Albertsons) tried, and failed. Publix despite being Publix deserves credit for doing what many chains couldn't do. Harris Teeter I suppose also had a good run though failed in Atlanta and Nashville, but now it seems Kroger has largely played a Kroger and stopped building many new stores. But after I leave FL, I never come back and wish I had a Publix at home. Hy Vee, Meijer, Wegmans... different story.
A turnaround effort at WD is possible but it would require purging more stores. They're down to a little more than a dozen Harveys locations—those should probably close. Harveys as a brand got very diluted, it was moved into a discount brand under SEG and has less stores than when Delhaize bought into it back in 2003. With BI-LO dead and Winn-Dixie's expansion effectively halted years ago, they don't have a lot of options except to merge with another company or wind down business. Even as Publix has expanded its footprint, it still has the association as the store of Florida.

The only way Albertsons would get into it is if it somehow frees itself from Kroger and gets roped into it through some investment deal, and the only way Kroger would get into it is if they got out of Albertsons and it was offered at a major discount. Kroger's main acquisition targets is "high local market share" and "self-distributing", SEG doesn't really have either, as the former was decimated by Publix and Walmart, and the latter they sold out to C&S years ago.

And if either of them DID get a hold of SEG, it's a fixer-upper.
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Re: Southeast Grocers Exploring Sale

Post by storewanderer »

My guess is Publix will be the buyer in the event of Southwest Grocers being sold.

Given all the competition, Wal Mart, etc., I am sure Publix can easily address any competition concerns that are brought up.
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