Kroger will also sell Haggen banner to C&S

[storewanderer]

I think this is worthy of its own thread given the baggage surrounding the Haggen name.

Somehow I missed this before, but it is in the official release:

"Under the amended agreement, Kroger will also sell the Haggen banner to C&S. "

So they are dumping off the QFC, Haggen, and Marianos banners. Arguably these are the most "upscale" banners in the chains.

But the other thing with Haggen is how much overlap is there really? Does it appear the majority of Haggen ends up divested? I never really saw that happening; I always assumed they'd opt to divest the lower quality Safeway/Albertsons units and hold on to the nicer Haggen units.

And then what banner goes on the retained Haggen units. Safeway? Fred Meyer Marketplace? Ugh... those are NOT a fit for Haggen.

I wonder if amending the CA divest agreement and adding more stores to that will come with an agreement to divest the Pavilions banner as well...

Now I wonder if C&S would try to expand the Haggen banner outside its original territory again... that would be... funny. Very funny. Maybe the old signs are all sitting somewhere ready to use.

[ClownLoach]

I think this is worthy of its own thread given the baggage surrounding the Haggen name.

Somehow I missed this before, but it is in the official release:

"Under the amended agreement, Kroger will also sell the Haggen banner to C&S. "

So they are dumping off the QFC, Haggen, and Marianos banners. Arguably these are the most "upscale" banners in the chains.

But the other thing with Haggen is how much overlap is there really? Does it appear the majority of Haggen ends up divested? I never really saw that happening; I always assumed they'd opt to divest the lower quality Safeway/Albertsons units and hold on to the nicer Haggen units.

And then what banner goes on the retained Haggen units. Safeway? Fred Meyer Marketplace? Ugh... those are NOT a fit for Haggen.

I wonder if amending the CA divest agreement and adding more stores to that will come with an agreement to divest the Pavilions banner as well...

Now I wonder if C&S would try to expand the Haggen banner outside its original territory again... that would be... funny. Very funny. Maybe the old signs are all sitting somewhere ready to use.

If they divested the Pavilions banner then they might as well close every unit, at least the OC ones that are the bread and butter of the chain, because their primary clientele would refuse to enter any "lesser" store. Remember some of the newest Pavilions are closed Ralphs and Albertsons units that weren't "good enough" for the clientele but hang a Pavilions sign on the same undersized and mediocre store and they'll flock to it. They would have to divest all the Pavilions stores to Gelsons or Bristol Farms. And those surviving Pavilions do good volume especially in high end wines and liquor which is why they were selected to keep the banner and get the expanded liquor department with walk in wine cellars.

There was some speculation somewhere in the threads that it would be difficult to retain most of the original and best Haggen stores because of proximity to Fred Meyer locations, including Bellingham. Then discussion that Albertsons had dumbed down these stores and lowered the quality of prepared foods, deli, bakery, meats etc. So they are basically a Safeway with a different name. If that is true it is tragic especially since they know how to run a more upscale operation with Pavilions. They should have just handed the Haggen stores over to whoever did the new Pavilions in La Jolla, they know what the heck they're doing.

So if they are really just Safeway inside a Haggen building then I guess there's no issue changing a crapload of Safeway signs to Haggen since they seem hell bent on not letting go of the Safeway name up there.

My guess is C&S did their research and figured out the stink around the QFC name since it has a horrific reputation for cramped stores with prices 40% higher than Fred Meyer in the same neighborhoods, along with many small and cramped stores although I think many of those have gone by the wayside. The only nice QFCs I can recall are University Village and Vancouver/Camas, and both would be fine branded Fred Meyer Marketplace as they're definitely going to be kept. Meanwhile if C&S rebranded a hundred or more stores to QFC they might as well have installed Store Closing Sale banners at the same time as the sign. So I guess they get both banners now and they leave any QFC they get with that banner then change all the rest to Haggen. Still dumb.

The real answer should be that C&S gets the Safeway banner and Kroger licenses it in Norcal where they love it for some reason. End of story. Otherwise yes it looks like after being accused of being Haggen 2.0, C&S is actually going to be Haggen 2.0.

This is why I made the "possibly inaccurate" comment about the revised lists because the first round seemed pretty well calculated, but the new round just feels like they're throwing numbers and names at a wall to see what sticks with the regulators. And it cements the reason why we don't have location lists, I firmly think they don't actually have finalized lists but rather smaller lists of "must go" and "obvious overlaps" then they're going to just comb through the store lists and make bad last minute decisions on what locations fill in the rest of the list (I. E. Say they have 45 must go and obvious overlaps in California, with the rest undecided. Then they keep juggling numbers and finally say the AG says you need to divest 80 total including these specific 15 you didn't put on the original list. Then they just randomly grab 20 odd stores at the last minute and just dump them into the divests which usually means suburban or rural sites that are lesser volume).

[marshd1000]

As for Haggen being really a Safeway with a Haggen sign, I was just in the Auburn/Lake Tapps and Oak Harbor locations just recently. The Oak Harbor store is the only Safeway divest store from the Albertsons and Safeway merger that stayed Haggen. That store actually seems to do well as a Haggen. It is small but the product mix is still Haggen. I think that one survived as it is adjacent to the core territory. The Auburn store is awesome is not dumbed down! It was a former Top Foods. But as for expanding the Haggen banner, I can't see that happening outside of Whatcom and Skagit counties. There is too much baggage from the overexpansion! But if they bring the product mix of QFC up to Haggen levels, I could see dual ads for QFC and Haggen. But in places like Gig Harbor where Haggen took over and extremely nice Safeway and bombed, that store will become QFC. I think QFC had done ok before it became Main & Vine. Also, I think that Stanwood QFC, which is near a Haggen, will become a Fred Meyer Marketplace.

[Brian Lutz]

I'd also put Bella Bottega (Redmond) and Downtown Bellevue among the nicer QFC stores. Possibly also Crossroads Bellevue, Kirkland Urban (the former Parkplace store which got rebuilt during the redevelopment of that complex), Mercer Street and Broadway Market (Capitol Hill), but Broadway Market was basically a small Fred Meyer in all but name anyway so that one could easily be rebranded. I'd say there's a lot of QFCs that could just flat out be closed down and nobody would really care much though.

[SamSpade]

As noted in my "rebrand" thread here https://www.retailwatchers.com/viewtopic.php?t=4365, Haggen has only 15 locations remaining, 5 of which are in the Bellingham area.

In Olympia, I'm sure that C&S would choose to use one or the other brand exclusively. I would think it smarter to rebrand the Lacey QFC as a Haggen but then again, Haggen as TOP with a modern store (Not the earlier warehouse/"tough on prices") failed in that city so ... anyway.

As discussed, Bellingham is an interesting one. They closed the only Albertsons left up there in April 2016. They did build/open a new Safeway there in early February 2015. At the time, folks were excited. This is literally as Albertsons Companies took formal control of Safeway and Haggen acquired the divestitures required.

The 67,000-square-foot store will be open 24 hours a day, while the gas station will have its kiosk open from 6 a.m. to 10 p.m. The fuel pumps will be available 24 hours a day.

The upcoming opening represents a return to the Bellingham market for Safeway. The company has a store in Lynden, but it left Bellingham when it closed its remaining store in 1993.

“We’ve wanted to come back to Bellingham for a while,” Osborne said. “But we were waiting for the right opportunity.”

The new store is also providing a boost to local employment. The store is employing more than 200 people...

[marshd1000]

I'd also put Bella Bottega (Redmond) and Downtown Bellevue among the nicer QFC stores. Possibly also Crossroads Bellevue, Kirkland Urban (the former Parkplace store which got rebuilt during the redevelopment of that complex), Mercer Street and Broadway Market (Capitol Hill), but Broadway Market was basically a small Fred Meyer in all but name anyway so that one could easily be rebranded. I'd say there's a lot of QFCs that could just flat out be closed down and nobody would really care much though.

You may know that the Broadway Market QFC had been home to a non food Fred Meyer with a QFC across the street. When the QFC site was going to be redeveloped, initially the Broadway Market was going to gain a small Fred Meyer with food and then the concept flipped to being a QFC with a heavy mix with general merchandise. It was basically a Fred Meyer Marketplace in all but name. So I see this store being retained by Kroger and becoming a Fred Meyer again!

[Bluelightspecial]

I think this is worthy of its own thread given the baggage surrounding the Haggen name.

Somehow I missed this before, but it is in the official release:

"Under the amended agreement, Kroger will also sell the Haggen banner to C&S. "

So they are dumping off the QFC, Haggen, and Marianos banners. Arguably these are the most "upscale" banners in the chains.

But the other thing with Haggen is how much overlap is there really? Does it appear the majority of Haggen ends up divested? I never really saw that happening; I always assumed they'd opt to divest the lower quality Safeway/Albertsons units and hold on to the nicer Haggen units.

And then what banner goes on the retained Haggen units. Safeway? Fred Meyer Marketplace? Ugh... those are NOT a fit for Haggen.

I wonder if amending the CA divest agreement and adding more stores to that will come with an agreement to divest the Pavilions banner as well...

Now I wonder if C&S would try to expand the Haggen banner outside its original territory again... that would be... funny. Very funny. Maybe the old signs are all sitting somewhere ready to use.

There are some Pavilions they would never get rid of to C&S. Chains like Gelsons, Bristol Farms, & Whole Foods would pay top dollar. There is a crappy Whole Foods on Fairfax and Santa Monica that would pay top dollar for the Pavilions in West Hollywood. Same thing for the tine Gelsons right down the street. If you think C&S could manager Montecito or Newport Coast I have a bridge in Brooklyn to sell you.

[ClownLoach]

I think this is worthy of its own thread given the baggage surrounding the Haggen name.

Somehow I missed this before, but it is in the official release:

"Under the amended agreement, Kroger will also sell the Haggen banner to C&S. "

So they are dumping off the QFC, Haggen, and Marianos banners. Arguably these are the most "upscale" banners in the chains.

But the other thing with Haggen is how much overlap is there really? Does it appear the majority of Haggen ends up divested? I never really saw that happening; I always assumed they'd opt to divest the lower quality Safeway/Albertsons units and hold on to the nicer Haggen units.

And then what banner goes on the retained Haggen units. Safeway? Fred Meyer Marketplace? Ugh... those are NOT a fit for Haggen.

I wonder if amending the CA divest agreement and adding more stores to that will come with an agreement to divest the Pavilions banner as well...

Now I wonder if C&S would try to expand the Haggen banner outside its original territory again... that would be... funny. Very funny. Maybe the old signs are all sitting somewhere ready to use.

There are some Pavilions they would never get rid of to C&S. Chains like Gelsons, Bristol Farms, & Whole Foods would pay top dollar. There is a crappy Whole Foods on Fairfax and Santa Monica that would pay top dollar for the Pavilions in West Hollywood. Same thing for the tine Gelsons right down the street. If you think C&S could manager Montecito or Newport Coast I have a bridge in Brooklyn to sell you.

Exactly. At this point the Pavilions brand has been culled to just the most profitable and productive stores Albertsons Cos operates in SoCal. Anything that wasn't one of the Crown Jewels has been converted to Vons. They're not giving up Malibu, Montecito, La Jolla, West Hollywood, Sherman Oaks, any of the Newport Beach stores, etc. Furthermore it should be assumed no stores in those super affluent and massively profitable areas are on the divest list at all except maybe the remaining Avenida Pico Albertsons after the big one became Pavilions and they have a excellent argument that Talega is a different market so they should be able to keep the Ralphs Fresh Fare there. I have heard they're still in the process of planning more Vons and Albertsons to Pavilions conversions in San Diego County and up North (My guess is Paso Robles since Pavilions branding now goes to top liquor selling locations and that one is a wine monster selling literally thousands of bottles daily and requiring multiple employees restocking in the wine aisles open to close). They must know something about how divest requests would be made otherwise they would not have spent a fortune converting the Albertsons to Pavilions. I also expect if this merger closes that we will see a major push to upgrade many Fresh Fare to Pavilions in SoCal, probably relaunching the entire banner as "Ralphs Pavilions". Thus another reason why I find the reduced list of CA stores that only has ACI properties suspect as there are definitely situations where if they had to choose the Ralphs or the Pavilions to divest, the Ralphs is going (like Laguna Beach). But they're not going to voluntarily let even one of these stores go unless they are ordered by the state or FTC and they are not going to do it without a fight.

I also wonder if part of the relatively limited divestiture store count in California is that they shifted strategy and are going to argue that zero Pavilions, zero Food4Less, zero Fresh Fare should be divested as they are not "mainstream supermarkets" and instead are different categories with different competitors. They could argue that Food4Less is a Winco, Grocery Outlet, and Dollar format competitor, Pavilions is a Gelsons and Bristol Farms competitor, Fresh Fare "2.0" is a lame Whole Foods and Sprouts competitor, etc. And thus all should be excluded from consideration for divestiture. I suppose it doesn't cost much to try and file the paperwork as it isn't like their lawyers aren't already on salary.

There's not a snowballs chance in hell that any Pavilions or Fresh Fare at risk of being sold to C&S doesn't already have standing bids from Gelsons, Bristol Farms/Lazy Acres, and Whole Foods so they could flip it instantly for a profit. They could probably get triple or more what they're paying, more if a bidding war erupts. Could you imagine C&S buying a flagship like West Hollywood for only $5M? It'll never happen.

[storewanderer]

I think this is worthy of its own thread given the baggage surrounding the Haggen name.

Somehow I missed this before, but it is in the official release:

"Under the amended agreement, Kroger will also sell the Haggen banner to C&S. "

So they are dumping off the QFC, Haggen, and Marianos banners. Arguably these are the most "upscale" banners in the chains.

But the other thing with Haggen is how much overlap is there really? Does it appear the majority of Haggen ends up divested? I never really saw that happening; I always assumed they'd opt to divest the lower quality Safeway/Albertsons units and hold on to the nicer Haggen units.

And then what banner goes on the retained Haggen units. Safeway? Fred Meyer Marketplace? Ugh... those are NOT a fit for Haggen.

I wonder if amending the CA divest agreement and adding more stores to that will come with an agreement to divest the Pavilions banner as well...

Now I wonder if C&S would try to expand the Haggen banner outside its original territory again... that would be... funny. Very funny. Maybe the old signs are all sitting somewhere ready to use.

There are some Pavilions they would never get rid of to C&S. Chains like Gelsons, Bristol Farms, & Whole Foods would pay top dollar. There is a crappy Whole Foods on Fairfax and Santa Monica that would pay top dollar for the Pavilions in West Hollywood. Same thing for the tine Gelsons right down the street. If you think C&S could manager Montecito or Newport Coast I have a bridge in Brooklyn to sell you.

They are going to divest whatever FTC and CA AG demand they divest if they want the merger to go through. And they have an agreement to sell the stores to C&S and some sort of formula to determine the price of the stores being sold... the more profitable stores would obviously be sold for higher prices... So back to that if those parties FTC/CA AG tell them they need to divest the West Hollywood Pavilions because there is a Ralphs 1/2 mile away they're going to have to divest it. Maybe they can go to CA AG and tell them you let us have two Ralphs 1/2 mile apart nearby (Fountain/La Brea and Sunset/Fuller) so why not let us have that arrangement here in West Hollywood too but I'm not sure if that argument will help their case or hurt their case.

Of course C&S has made the claim they can manage whatever they get handed of this disjointed and likely spread far apart inconsistent group of divested stores. Just like Haggen did. Haggen thought they could manage San Ysidro and converting the Hispanic focused Lucky/Max Foods into a full price/full cost Haggen was a good idea, actually I think they had no clue what they were even buying and just did whatever. C&S is going to have to put a bit more thought into this since they have multiple banners they can apply.

On Newport Beach I expect the San Miguel Pavilions to be divested and nothing else. Something will get divested in Newport Beach. It should probably be two stores but I expect them to argue it to one store.

Marina Del Rey Pavilions and La Jolla Pavilions I also see as likely divests, but maybe they'll agree to divest a Vons that is over near La Jolla on the opposite side of the freeway in San Diego instead.

Sherman Oaks is an interesting situation. Although only one mile between the Pavilions and Ralphs, you have Gelson's and Whole Foods in the middle of the two. Plus another Whole Foods not too far from the Pavilions. And that is a rather LONG mile separating Ralphs and Pavilions. I think the presence of two Whole Foods may make them argue that it is okay to keep both stores there.

I think the two Malibu stores are far enough apart for both to be kept.

[storewanderer]

Exactly. At this point the Pavilions brand has been culled to just the most profitable and productive stores Albertsons Cos operates in SoCal. Anything that wasn't one of the Crown Jewels has been converted to Vons. They're not giving up Malibu, Montecito, La Jolla, West Hollywood, Sherman Oaks, any of the Newport Beach stores, etc. Furthermore it should be assumed no stores in those super affluent and massively profitable areas are on the divest list at all except maybe the remaining Avenida Pico Albertsons after the big one became Pavilions and they have a excellent argument that Talega is a different market so they should be able to keep the Ralphs Fresh Fare there. I have heard they're still in the process of planning more Vons and Albertsons to Pavilions conversions in San Diego County and up North (My guess is Paso Robles since Pavilions branding now goes to top liquor selling locations and that one is a wine monster selling literally thousands of bottles daily and requiring multiple employees restocking in the wine aisles open to close). They must know something about how divest requests would be made otherwise they would not have spent a fortune converting the Albertsons to Pavilions. I also expect if this merger closes that we will see a major push to upgrade many Fresh Fare to Pavilions in SoCal, probably relaunching the entire banner as "Ralphs Pavilions". Thus another reason why I find the reduced list of CA stores that only has ACI properties suspect as there are definitely situations where if they had to choose the Ralphs or the Pavilions to divest, the Ralphs is going (like Laguna Beach). But they're not going to voluntarily let even one of these stores go unless they are ordered by the state or FTC and they are not going to do it without a fight.

What is clear is the banner/format going forward in SoCal for mass stores is going to be Ralphs. If they are smart it'll be Ralphs/Pavilions as the banners they market going forward, delete Fresh Fare, and then of course F4L off to the side, and keep the Vons name on lousy outdated stores. Rebrand them to Ralphs or Pavilions as they are properly remodeled.

I don't see Paso Robles Albertsons being rebranded to Pavilions. It also functions as basically the only mid-level conventional grocery store in that entire city since the lousy Vons there which was rather popular got divested to Haggen which was a real shame then Smart & Final got it (they also operate the former Scolaris in Paso Robles; that was Scolaris newest store). What I possibly see is Paso Robles being rebranded to Safeway and moved into NorCal Division as the Tracy distribution center is closer to it than any SoCal distribution.

I wouldn't do a banner called "Ralphs Pavilions." Wipe the Ralphs name off the stores entirely and run them as an upscale/higher priced format as Pavilions. Eliminate Fresh Fare entirely also, convert to Pavilions or just shift to standard Ralphs (some Fresh Fares are so poor that maybe a conversion to the downscale Vons banner would be more appropriate pending major renovations).