Erickson's Thriftway in Burns, Oregon, closed

[storewanderer]

Rays bought a lot of little independent stores in the years leading up to the bankruptcy. Some of these were actually the only store in town. Rays took on quite a bit of debt in doing this. There was also an issue where Ray killed himself and his wife before the bankruptcy and I am not sure if his absence also caused problems.

The new stores they built in the 00's actually were only in the 40k square foot range and quite a bit smaller than the stores they built in the early to mid 90's which were closer to 50k square feet.

This was also the period when Safeway was heavy on the Lifestyle remodel program which was a poor fit for smaller markets and was pushing prices sky high. This should have been an opportunity for Rays. Rays responded to that by pushing prices even higher than Safeway.

Then later stuff like Dollar General started showing up in these small towns which also put pressure on Rays.

More recently additional Grocery Outlet expansion has put pressure on Rays.

Another issue before bankruptcy was Rays bought a lot of disjointed stores. For instance in Grants Pass they took over two Market of Choice units (which had been Price Choppers or some discount format). Down the road in Rogue River they bought a 10k square foot run down independent. A common decor package program did not make up for wild inconsistency in store size.

Before Rays went bankrupt I wondered if they would be a good candidate for Kroger. At the time they felt a lot like Jay C. But Kroger programs and pricing could have revitalized many of the stores and there was almost no overlap with Fred Meyer.

[bryceleinan]

Rays bought a lot of little independent stores in the years leading up to the bankruptcy. Some of these were actually the only store in town. Rays took on quite a bit of debt in doing this. There was also an issue where Ray killed himself and his wife before the bankruptcy and I am not sure if his absence also caused problems.

The new stores they built in the 00's actually were only in the 40k square foot range and quite a bit smaller than the stores they built in the early to mid 90's which were closer to 50k square feet.

This was also the period when Safeway was heavy on the Lifestyle remodel program which was a poor fit for smaller markets and was pushing prices sky high. This should have been an opportunity for Rays. Rays responded to that by pushing prices even higher than Safeway.

Then later stuff like Dollar General started showing up in these small towns which also put pressure on Rays.

More recently additional Grocery Outlet expansion has put pressure on Rays.

Another issue before bankruptcy was Rays bought a lot of disjointed stores. For instance in Grants Pass they took over two Market of Choice units (which had been Price Choppers or some discount format). Down the road in Rogue River they bought a 10k square foot run down independent. A common decor package program did not make up for wild inconsistency in store size.

Before Rays went bankrupt I wondered if they would be a good candidate for Kroger. At the time they felt a lot like Jay C. But Kroger programs and pricing could have revitalized many of the stores and there was almost no overlap with Fred Meyer.

Something else to consider too is how Ray’s maintains stores in some of their markets. For example, they own both the Shop Smart and Ray’s (former Sentry) in La Pine, a town of 2,500 about 30 miles south of Bend, at the border of Deschutes and Klamath counties. La Pine also has the first or second busiest Bi-Mart (this one and Winston are consistently 1/2) and a Grocery Outlet. Sisters, in western Deschutes County, is another town where the only competition is Bi-Mart (in the same plaza).

They also have the store in Bandon, that only has to compete with McKay’s. They previously owned the now-current Safeway in Coos Bay, the store adjacent to Fred Meyer.

[storewanderer]

Something else to consider too is how Ray’s maintains stores in some of their markets. For example, they own both the Shop Smart and Ray’s (former Sentry) in La Pine, a town of 2,500 about 30 miles south of Bend, at the border of Deschutes and Klamath counties. La Pine also has the first or second busiest Bi-Mart (this one and Winston are consistently 1/2) and a Grocery Outlet. Sisters, in western Deschutes County, is another town where the only competition is Bi-Mart (in the same plaza).

They also have the store in Bandon, that only has to compete with McKay’s. They previously owned the now-current Safeway in Coos Bay, the store adjacent to Fred Meyer.

Shop Smart has been a dormant concept for quite some time. It basically is Rays where the prices end in 8 instead of 9. 20 years ago it was an actual discount-ish type of format.

They had a similar set up in Yreka (I think the discount store there was called Price Less Foods) with the two stores very close together. They ended up closing both.

I generally liked what Ray's was trying to do (build a chain of a bunch of far flung small town stores- take stores over from independents who wanted to retire and couldn't find anyone to take the stores over as the stores didn't really make much money but provided a living to the owner-operator) but they failed in the execution of buying too many stores too quickly and a really messed up price scale. I also suspect many of those independent stores which may have thrown a $80k per year profit to the independent owner-operator suddenly started losing money when put under the corporate structure of Ray's and getting shifted with the corporate overhead of Ray's, interest expense from Ray's debt, etc. They also didn't have the greatest perimeter quality control but I think the low store volumes were much of the cause of that problem.

Ray's was a lot better in the early 90's. That is when they built stores like Coos Bay, Crescent City (closed), Medford (current Natural Grocers), Cloverdale, maybe even Phoenix OR (maybe that is a little older), and also got heavy into pharmacy,