Raleys lays off 47 corporate employees

[storewanderer]

https://www.bizjournals.com/phoenix/new ... yoffs.html

[veteran+]

no surprise......................

[storewanderer]

no surprise......................

Business is great for most grocers, and Wal Mart/Target.

Raleys operates in fast growing markets like Reno, Phoenix, Sacramento.

I guess when you focus too many resources on a terrible format (ONE) this is what happens. But Safeway absolutely thanks Raleys for their ONE program. This has been very helpful for Safeway and getting those new stores they built in Reno and El Dorado Hills into being very strong from day one. Usually new stores take years to profit. Thanks to Raleys ONE, the timeline was significantly accelerated.

Maybe they need to work out a deal to sell to Save Mart.

[ClownLoach]

no surprise......................

Business is great for most grocers, and Wal Mart/Target.

Raleys operates in fast growing markets like Reno, Phoenix, Sacramento.

I guess when you focus too many resources on a terrible format (ONE) this is what happens. But Safeway absolutely thanks Raleys for their ONE program. This has been very helpful for Safeway and getting those new stores they built in Reno and El Dorado Hills into being very strong from day one. Usually new stores take years to profit. Thanks to Raleys ONE, the timeline was significantly accelerated.

Maybe they need to work out a deal to sell to Save Mart.

ONE does smell like a corporate sacred cow project. The C-suite sets up some kind of bogus compensation plan for themselves with dubious "goals" to be met around launching a new format like ONE. Then they put together an entire team of people who become indispensable because they are in charge of the program. Suddenly you've got tens of millions of dollars being invested into a money pit that contributes nothing to the overall organization so that these executives can "earn" six and seven figure bonuses for the "success" of the program. "Success" being measured against objectives such as "doors physically opened on building with ONE sign" instead of profit, comp sales, customer satisfaction, etc.

These types of operations get set up in companies and eat them from the inside out, and eventually the leadership at the top gets forced out due to lack of profitability. The first thing the new leadership does is come in, find these ONE type money pit operations and kill them. Then they look like geniuses because they have increased profitability in their first quarter on the job. But eventually their results start to flatten, and they come up with great new ideas to reward themselves for (without any objective measures like profit etc.) and then you'll get... Raley's 2.0... The new "ONE"

[storewanderer]

Raleys ONE concept seems to be directly from the owner of the company.... and on its face a clean label store focused on Organics is a very good idea.

The execution and implementation of the concept by Raleys upper and middle management or whatever consultants and vendors/suppliers they used is where the issues came in. Wrong items, wrong prices, stuck in the "must get long shelf life and minimize labor costs" mentality at bakery and deli...

Horribly arrogant marketing directed at the customer. "Where's my (frozen meal, yogurt, cereal, etc.)" signs stating they are focused on better for you items and see their staff for alternative suggestions.

[pseudo3d]

They made a mistake in buying Bashas'.

[storewanderer]

Updated thread to reflect actual positions cut per article:
https://www.bizjournals.com/phoenix/new ... yoffs.html

**********
Quote
"The Raley's Companies notified employees Thursday that 72 corporate employees working in administrative support positions would have their roles eliminated, effective Feb. 2. Carbahal said 25 of those employees have been offered roles within the company's stores. The company is also eliminating 38 administrative support jobs that are currently open.

Carbahal said the role eliminations are across multiple operating divisions including Bashas' and fieldTRUE, which is the company's direct-to-consumer, subscription-based produce box company.

The job eliminations represent a reduction of 0.2% of The Raley's Companies' total workforce, which is approximately 21,000 employees. Carbahal said she was unsure how many of the permanent layoffs were local."
************************

[storewanderer]

They made a mistake in buying Bashas'.

I am not sure Bashas would be open if they hadn't bought it... but they really need to do some serious work on Bashas banner. Food City is probably okay as it is but it could be so much better.

[retailfanmitchell019]

I am not sure Bashas would be open if they hadn't bought it... but they really need to do some serious work on Bashas banner. Food City is probably okay as it is but it could be so much better.

I suspect Yucaipa Companies would’ve bought Bashas and done a ‘Fresh & Easy maneuver’ (aka liquidation, probably selling the rural AZ stores to Albertsons) had Raley’s not bought them. That, or Aldi would be kicking the tires at Bashas as we speak.

There have been rumors on and off over the past 25 years of Ahold acquiring Raley’s.

A Save Mart merger would make sense, being that both chains have a joint venture for private label, Super Store Industries. What banner would you use assuming both were to merge? Raley’s has a better reputation.

[storewanderer]

I am not sure Bashas would be open if they hadn't bought it... but they really need to do some serious work on Bashas banner. Food City is probably okay as it is but it could be so much better.

I suspect Yucaipa Companies would’ve bought Bashas and done a ‘Fresh & Easy maneuver’ (aka liquidation, probably selling the rural AZ stores to Albertsons) had Raley’s not bought them. That, or Aldi would be kicking the tires at Bashas as we speak.

There have been rumors on and off over the past 25 years of Ahold acquiring Raley’s.

A Save Mart merger would make sense, being that both chains have a joint venture for private label, Super Store Industries. What banner would you use assuming both were to merge? Raley’s has a better reputation.

Bashas was in serious trouble when Raleys bought it. Their warehouse did not have adequate product to supply its stores... Raleys literally had to go in and put a cash infusion in to do an inventory buy to get the warehouse filled back up. The situation for Bashas was not good when Raleys stepped in. The issue was with the inflation they had sold items that cost them $1 and priced them accordingly but now with inflation to restock the warehouse it would cost them $1.20 for those items and that caused them some very serious difficulties. I hate to say it may be a case where they tried to absorb price increases assuming the inflation was temporary (since that is what the current crop of politicians tell us) but when it became clear it wasn't temporary then it put them into a bad situation of not being able to buy enough inventory for their stores. I probably would have done the exact same thing...

What is Yucaipa currently doing? Do they run any stores? Or just real estate?

Super Store Industries is still a joint venture for certain distribution but Raleys does have its own warehouse for some items also. Raleys also has its own bakery plant. Raleys is doing its own thing on private label for the most part. SSI sold off the fluid milk operation of Sunnyside. I think SSI still owns something for Sunnyside but I am not sure what, maybe a juice plant or ice cream plant or something.

I do not see Ahold acquiring Raleys in its current form. Back when Raleys was a group of mostly high quality assets in NorCal/Reno - mostly large combo food/drug stores well positioned in upper middle class locations, yes, maybe. But now- Raleys has seriously cut back on the "drug" side of their stores, closed half of their pharmacies, adding in the Scolaris and Bashas stuff which skews toward smaller stores in less desirable neighborhoods, I do not see this being a fit for Ahold at all.

Raleys core assets- virtually all of the Raleys banner, the Bel Air banner, are really good assets. What is still open of Nob Hill does have some smaller stores but it is also pretty good. But the former Scolaris assets are just not good, even the one in the better neighborhood in Reno that they did a full remodel on is unimpressive (the others in the less desirable areas/rural locations are just awful stores as Raleys, an embarrassment to their brand), and Bashas/Food City really needs work- Bashas banner has potential but they need to actually get aggressive and go after increasing customers. Food City has customers but a lot of it is on perimeter; they need to work on mix in center store to get more action there.