Albertsons

From Wikipedia, the free encyclopedia
  (Redirected from Albertsons (SuperValu))
Jump to: navigation, search
Albertsons LLC
Type Private
Industry Retail
Founded 1939
Headquarters Boise, Idaho, U.S.
Number of locations 1,075 (2014)[1]
Key people Robert Miller, CEO
Products Bakery, dairy, deli, frozen foods, general grocery, meat, pharmacy, produce, seafood, snacks, liquor
Revenue $21 billion (2013)[2]
Employees 112,000 (2013)[3]
Parent Cerberus Capital, L.P.[4]
Website Albertsons.com

Albertsons LLC is an American grocery company founded and based in Boise, Idaho. In July 2014, it acquired Safeway Inc for $9.2 billion.[5] The newly merged company has more than 2,400 stores and over 250,000 employees,[6] which makes it the second largest supermarket chain in North America after The Kroger Company, which has 2,424 stores. The deal is expected to close during the fourth quarter 2014, pending a review by the Federal Trade Commission.[7] Prior to the merger it had 1,075 supermarkets located in 29 U.S. states under 12 different banners. Its predecessor company, Albertsons, Inc., was sold to Albertsons LLC (a Cerberus Capital Management-led consortium), CVS Pharmacy, and SuperValu Inc. in 2006. CVS acquired the freestanding drugstores while the Cerberus-led consortium (Albertsons LLC) and Supervalu (New Albertsons, Inc.) divided the supermarket divisions among themselves. After selling the majority of its stores to various buyers, in January 2013, Albertsons LLC, acquired SuperValu's remaining Albertsons stores, as well its ACME, Jewel-Osco, Shaw's and Star Market brands, in exchange for $100 million in cash and $3.2 Billion in SuperValu debt. The sale was completed by March 2013. The company's corporate name was Albertson's until 2002, when the apostrophe was removed.[8]

History[edit]

Beginnings[edit]

Albertsons was founded by Joe Albertson in 1939 in Boise, Idaho. An ad in the Idaho Statesman newspaper touted Joe Albertson's first store as "Idaho's largest and finest food store." The store was filled with perks that, at the time, were brand new: free parking, a money-back guarantee, and even an ice cream shop. The original store is still located at 16th and State Streets, a few blocks northwest of downtown Boise.

The cheese department of an Albertson in Seattle (1955)

Joe Albertson's grocery store was an enormous success, and he plowed his profits back into the business. New stores were opened in neighboring towns to the west, Nampa, Caldwell, and Emmett, before Pearl Harbor in late 1941. The company grew steadily in the years following World War II. When Albertson was considering putting a new store in a town, he would drive around the town and look for neighborhoods with lots of children's clothing hanging on clotheslines; he knew that those kinds of neighborhoods were where he wanted to build his stores.

Albertsons, Inc. became a public company in 1959, and its growth continued, opening its 100th store in Seattle in 1964. In 1966, Albertsons expanded to southern California by acquiring Greater All American Markets, a small chain in Orange County.

Partnering with Skaggs[edit]

In 1969, Albertsons partnered with Skaggs Drug Centers, owned by The Skaggs Companies, Inc., to create the first combination food/drug stores. The partnership was a tremendous success for several years. The partnership ended due to the fact that it was getting more difficult to control. Neither partner could buy each other out, and the partnership was dissolved amicably in 1977. Skaggs kept stores in Texas, Oklahoma, and Arkansas, and Albertsons kept stores in Florida, Alabama, and Louisiana, as well as some Texas stores. Albertsons added three Skaggs-Alpha Beta stores in Austin within months after entering that market in early 1989 with the acquisition of six Tom Thumb Food & Pharmacy stores. In 1992, seventy-four of the remaining Skaggs stores (having been through several names under Skaggs/American Stores control, first "Skaggs SuperCenters", then "Skaggs-Alpha Beta", and finally "Jewel-Osco") in Oklahoma, Florida, Arkansas, and Texas were acquired by Albertsons from Skaggs/American Stores, including all 53 Jewel-Osco stores in Texas. Albertsons would increase its store count in the Dallas-Fort Worth area by adding 41 Jewel-Osco stores to its 19 stores already in operation. (These were also stores that only months before were rebranded from Skaggs-Alpha Beta to Jewel-Osco.) The stores would be rebranded as Albertsons.

The Skaggs acquisition was a success, and the new stores were integrated into Albertsons' Texas division. The ease of that acquisition and Albertsons' high-flying stock price led Albertsons to attempt expansion on a grand scale. In a series of acquisitions in the late 1990s, Albertsons acquired Seessel's in the Memphis, Tennessee market; 14 Bruno's stores in the Nashville and eastern Tennessee markets; Smitty's in the Springfield, Missouri market; Super One Foods in the Des Moines, Iowa market; and Buttrey Food & Drug in Montana, Wyoming, and western North Dakota. All of those stores except Seessel's were re-bannered as Albertsons, and several new stores were built, concentrating growth in fast-growing markets throughout Tennessee. Of those acquisitions, only Buttrey was smoothly integrated into Albertsons; by the end of 2005, all of the Albertsons and Seessel's stores in Tennessee outside Memphis had been closed, and the rest had been sold to Schnucks of St. Louis, Missouri. The former Smitty's was divested to Price Cutter, and Super One was closed and the buildings sold.

American Stores[edit]

A typical Albertsons in Boise, Idaho.

In 1999, Albertsons made its biggest acquisition: American Stores Company, which included the chains ACME in Pennsylvania, New Jersey, Maryland, and Delaware; Lucky in California and Nevada; Jewel and Jewel-Osco in Illinois, Indiana, Iowa, and Michigan, and two pharmacy chains: Osco Drug and Sav-on Drugs. The acquisition briefly made Albertsons the largest American grocery operator, with over 2,500 stores in 37 states, until Kroger's acquisition of Fred Meyer closed the following month. To make the acquisition, Albertsons was forced by anti-trust concerns to sell nearly 100 stores, primarily in California, Nevada, and New Mexico. In southern California, there were already Albertsons, so in order to not have two banners in the same area, Lucky stores were converted to the Albertsons banner in November 1999, and the Lucky brand name was retired.

In 2001, Albertsons sold its freestanding Osco Drug stores in the northeastern states to Jean Coutu Group, a Canadian drug store company. Those stores were re-branded as Brooks Pharmacy after the sale was completed in January 2002. In March 2005, Albertsons re-introduced the Osco brand name to the New England region by way of its Shaw's and Star Market pharmacies. Also, Albertsons began issuing Albertsons Preferred Savings Cards.

Albertsons exited the San Antonio, Texas, market in April 2002 by closing its 20 remaining area stores after already shuttering three other stores in December 2001. Albertsons was ranked as the area's number two grocer by market share, compared to H-E-B's top position in the market. At the time of the withdrawal, the 44-store H-E-B chain held a commanding 61 percent market share, while Albertsons held a 15 percent market share. Albertsons had held the third position at the time Kroger exited the market in mid-1993 when it closed its 15 area stores. Then, H-E-B's 37 area stores held a 43.2 percent market share, Kroger's 15 area stores a 13.7 percent share, and Albertsons' 10 stores a 13.1 percent share.

Also in 2002, Albertsons sold its Seessel's supermarket chain in Memphis and parts of Mississippi to Schnucks, Brookshire's, and pulled out of Houston, closing its 43 area stores leaving them to Kroger and Randalls after entering that market in 1990.

In 2004, Albertsons acquired Shaw's Supermarkets and Star Market Company from Sainsbury's for $2.5 billion. During the same time, Albertsons exited the markets of Omaha, Nebraska and New Orleans, Louisiana; closing over 20 stores. However, the company has since re-entered the New Orleans market.

Sale to SuperValu, CVS, and Cerberus[edit]

The acquisition spree caused significant problems for Albertsons, Inc. Many of the acquired chains had systems that did not mesh well with Albertsons. Financing those acquisitions required Albertsons Inc. to take on significant debt. Added to those problems were significant changes in consumer buying patterns, including new competition from large discounters such as Walmart and Costco that impacted sales.

After several reorganizations and waves of store closings, on January 23, 2006, Albertsons, Inc., agreed to be acquired by SuperValu, a Cerberus-led group of investors, and CVS Pharmacy. The acquisition was completed on June 2, 2006 with the Cerberus-led group (who also included Kimco Realty Corporation, Schottenstein Stores Corp., Lubert-Adler Partners, and Klaff Realty) acquiring 661 stores and the distribution centers and offices from five of Albertsons divisions. These five divisions were thought to be Albertsons' five weakest divisions, and conventional wisdom in the industry was that the stores would eventually be closed or sold to other operators.

As of June 2, 2006, the company's retail stores were divided as follows:

  • SuperValu has acquired 1124 stores in the deal, including:
    • ACME (134 locations)
    • ACME Express, Jewel Express, and Albertsons Express (107 fuel centers)
    • Albertsons (564 locations in Southern California, Idaho, Montana, Nevada, North Dakota, Oregon, Utah, Washington and Wyoming) - New Albertsons Inc. (later sold to Albertsons LLC)[9]
    • Bristol Farms (11 locations)
    • Jewel and Jewel-Osco (198 locations)
    • Lazy Acres (1 location)
    • Max Foods (4 locations) (3 converted into Lucky, 1 became Albertsons in July 2006)
    • Osco Pharmacy and Sav-on Pharmacy (906 pharmacies)
    • Save-A-Lot (2 stores franchised by Shaw's)
    • Shaw's (169 locations)
    • Star Market (20 locations)
    • Distribution centers (11 centers)
  • CVS acquired all (approximately 702) of the stand-alone Osco Drug and Sav-on Drugs rebranding them all as CVS Pharmacy, though they closed approximately 100 of the acquired stores. Many CVS locations were close to Sav-on stores.
  • The Cerberus-led group acquired:
    • Albertsons (655 locations in Arizona, Northern California, Colorado, Florida, Louisiana, New Mexico, Oklahoma, Texas, and Wyoming - Albertsons LLC)
    • County Line Liquors (1 location)
    • Grocery Warehouse (1 location)
    • Jewel-Osco (2 locations)
    • Max Foods (2 locations)
    • Super Saver Foods (23 locations, 21 closed in late 2006)

Post-acquisition[edit]

Following the sale, Albertson's, Inc., was removed from the NYSE. New Albertson's, Inc., has become the successor company to Albertsons according to SEC filings.[10] Albertsons LLC was also formed as part of the reorganization of assets and liabilities and will eventually be led by the Cerberus group.

The five Albertsons Inc. divisions that became Albertson's LLC were the Dallas/Fort Worth division (Texas (except El Paso), Oklahoma, Louisiana, and Arkansas), the Rocky Mountain division (Colorado, Wyoming, Nebraska, and South Dakota), the Southwest division (Arizona, New Mexico and El Paso, Texas), the Florida division (Florida), and the Northern California division (northern California and northern Nevada). Albertson's LLC has concentrated on rebuilding market share and its store base in its strongest areas, and divesting stores and other property in its weaker areas.

On June 6, 2006, only one week after Albertson's LLC was created, the company announced its intent to close 100 Albertsons stores by August 2006.[11] Those closures were spread across all five divisions. Soon after, the company announced that it would be shutting down its online delivery service on July 21, 2006.[12] To distinguish the two companies, Albertsons LLC created a second website, AlbertsonsMarket.com.

In 2007, New Albertsons created the "Crazy About Food" slogan and campaign. At the same time, the company dropped spokesperson Patricia Heaton. In an effort to unify the entire SuperValu company, a new slogan was introduced at the end of 2008 throughout the company and is "Good Things are Just Around the Corner."[13] Previous slogans were "At Albertsons, We Think Like You Do.", "It's Your Store.", and "Helping Make Your Life Easier."

In June 2007, Albertson's LLC decided to discontinue its Preferred Savings Card Program, choosing instead offer discounted items to all of its customers.[14] In September, 2007, all Albertsons stores in the Dallas/Fort Worth, Texas, and Florida markets began collecting their Albertsons Preferred Savings Cards.[15]

In 2008, New Albertsons divested Bristol Farms to its senior management.

Sales and store closures[edit]

In November 2006, Albertson's LLC and Save Mart Supermarkets acquired Albertsons' Northern California and Northern Nevada locations and began operating the store in February 2007.[16] The company gradually converted all the stores to its Save Mart banner, except for stores in the San Francisco Bay area, which were rebranded as Lucky.[16] Most of the Albertsons locations had originally been branded as Lucky before Albertson's 1999 purchase of American Stores.[16]

A typical Albertsons-Savon store in Dallas, Texas

Between 2006 and 2012, Albertsons announced store closures in several states including Colorado,[17][18] Florida,[19] Nebraska,[20] Oklahoma,[21] South Dakota,[20] and Texas.[22]

On June 12, 2007, Albertson's LLC agreed to acquire all Raleys locations in New Mexico. The acquisition includes one closed and eight operating stores in Albuquerque and one store in Taos, thus doubling Albertsons store base in the Albuquerque region.[23] In December 2007, SuperValu acquired the eight remaining Wyoming locations from Albertson's LLC not already owned by the company. These stores continued to operate under the Albertsons banner.[24]

On May 5, 2008, Albertson's LLC announced the sale and divestiture of all 72 of the Albertsons Express fuel centers to San Antonio, Texas-based Valero Energy Corporation. Most of the Albertsons Express stores were located in the Phoenix, Arizona; Denver, Colorado; Baton Rouge and Lafayette, Louisiana; and Dallas-Ft. Worth markets. The transaction was completed in August 2008. Valero converted the acquired locations into Valero Corner Stores.

In June 2008, Albertson's LLC entered into an agreement with Lakeland, Florida-based Publix stores to sell 49 Florida Albertsons locations to the chain. This included 15 stores in Northern and Northwest Florida, 30 locations in Central Florida, and four locations in South Florida. The sale was completed in September.[25] In July 2009, SuperValu announced that it was selling 36 of its 43 Utah Albertsons locations to Associated Food Stores.[26] All stores were rebranded as Fresh Market.[26]

In September 2012, SuperValu announced the closure 26 Albertsons stores in the U.S. as part of a decision to close about 60 stores nationwide.[27]

A former Albertsons location in St. Petersburg, Florida, now operating under the Publix Super Markets banner

Sale to Cerberus[edit]

On January 10, 2013, it was announced[28] that Supervalu was selling New Albertsons (Albertsons and the ASC purchased stores) to Cerberus Capital Management, which own the rest of the Albertsons stores. Since then, the Albertsons LLC-owned stores have come into the fold. In February 23, 2013, Albertsons LLC announced it would split operations of the combined chain into five divisions: Northwestern, Intermountain, Southern California, Southern, and Southwestern.

In June, the AlbertsonsMarket.com website and its Facebook page were merged into the Albertsons.com website and its Facebook page as part of the merger of the two companies. At the same time, the "It's a Great Deal" slogan adopted by Albertsons LLC/Albertsons Market since 2006 was replaced with "You're In for Something Fresh."

United Supermarkets acquisition[edit]

On September 9, 2013, the company acquired Lubbock-based supermarket United Supermarkets LLC.[29] On February 4, 2014 the FTC voted 4-0 to approve the deal. The acquisition deal cost Albertsons $385 million and required Albertsons to sell its single stores in the Amarillo, Texas and Wichita Falls, Texas markets.[30] The United Supermarkets family brands include Market Street, Amigos, and United Express.[31]

Safeway acquisition[edit]

On February 19, 2014, Safeway began to explore selling itself, and as of February 21, 2014 it was in advanced negotiations with Cerberus Capital Management.[32] On March 6, 2014, Cerberus (which also owns rival grocery chain Albertsons) announced they would purchase Safeway for $9.4 billion in a deal expected to close in the 4th quarter of the year.[33]

On July 25, 2014, Safeway stockholders approved the merger with Albertsons.[6] The Federal Trade Commission continues to review the transaction, which is now expected to close in the first quarter of 2015.

Chains[edit]

Albertsons-owned locations in various states

Albertsons operates stores under the following banners:

Brands[edit]

Albertsons owns several store brands ("private label" brands), often bearing the name of the chain sold under, e.g. "Jewel" brand products in the Jewel and Jewel-Osco locations. Other Albertsons brands over the years have included Good Day, Village Market, A+, Master's Choice, and Janet Lee (named after the executive vice-president's daughter). The drug store brands (used for health and beauty aids, over-the-counter medications, and intimate paper goods) were consolidated under the name "Equaline," rather than the previous name, "Sav-On Osco by Albertsons" brand. Albertsons introduced an upscale private label brand, "Essensia," in 2003, which has now been renamed by SuperValu as Culinary Circle. Store brand items in Albertsons stores include Albertsons (national brand quality food), Shoppers Value (value priced items), Homelife (national brand quality non-foods), Culinary Circle ("gourmet" foods and ready-made meals), Whole Care Pet (pet foods and supplies), Baby Basics (diapers and infant care items), Java Delight (coffee), Farm Fresh (fresh produce), Arctic Shores (frozen seafood), Stockman & Dakota (high-quality beef), Flavorite (national brand quality foods, used throughout Supervalu stores), Stone Ridge (ice cream and sherbet), Super Chill (soft drinks and mixers), Equaline (health and beauty products), and Wild Harvest (natural and organic foods). In 2011 SuperValu announced it would eliminate Flavorite and all brands named after the chains it operates (such as Albertsons, Jewel, Shaw's, etc.) and would replace those labels with a new label, Essential Everyday.

Technology[edit]

Albertsons was increasingly progressive in the area of technology, having in recent years added a "check out while you go" system, known as "Shop 'N' Scan", where shoppers scanned items as they shopped and quickly paid before leaving. This was tested at Albertsons (now LLC) stores in Texas. This system has since been removed from some stores.

Albertsons offered (in certain areas) its customers the option to shop from home via the company's website. Pickups were arranged at the store, or the items were delivered to the customer's home. In areas where this program was in effect, it was widely advertised over television and radio by corporate spokeswoman Patricia Heaton.

At the beginning of 2009, SuperValu introduced a new innovative way to help customers shop healthy known as nutrition iQ. This program identifies the health benefits of over 60,000 products in 11 different health categories.

On June 11, 2013 Albertsons announced its plans to merge its duplicate websites, social media accounts and mobile apps onto one of each kind.[34] While its website consolidation appeared to take place as expected, its applications received bad reviews[35]—but the biggest consequence was the mistaken deletion of their previous Facebook page and loss of over 200,000 fans. While no details were given as to the mistake made, Albertsons simply admitted that while attempting to join their Albertsons page with over 200,000 Likes and their Albertsons Market page with over 80,000 Likes, something went wrong resulting in the loss of thousands of Likes and comments.

Preferred Savings Card[edit]

Prior to the introduction of the Albertsons Preferred Savings Card in 2001 to all stores, Albertsons used a savings program called "Bonus Buys." "Bonus Buys" were available to anyone that shopped at Albertsons. Preferred Savings Cards are issued to all shoppers and allow for customers to actually see the savings. The cards were also used in a gas rewards program beginning in 2009. Only the SuperValu-owned Albertsons stores continued to use the Preferred Savings Cards, as the Albertsons LLC stores discontinued them after September 2007. In June 2013, the use of the Preferred card in the former SuperValu stores was discontinued.[36] The cards briefly continued in Southern California stores before being discontinued in July 2013.

References[edit]

  1. ^ "The end of the traditional supermarket". The Washington Post. March 6, 2014. 
  2. ^ "Kroger Co". Bloomberg. 
  3. ^ Dutton, Audrey (19 November 2013). "A fresh start for Boise’s Albertsons chain". Idaho Statesman. Retrieved 3 June 2014. 
  4. ^ Solomon, Brian (6 March 2014). "Cerberus Buys Safeway, Merges It With Albertsons For Over $9 Billion". Forbes. Retrieved 3 June 2014. 
  5. ^ Leanne Suter (July 26, 2014). "Albertsons buys Vons owner Safeway for $9.2 billion". ABC Eyewitness News. Retrieved August 1, 2014. 
  6. ^ a b Maria Armental (July 25, 2014). "Safeway Shareholders Approve Albertsons Merger". The Wall Street Journal. Retrieved August 1, 2014. 
  7. ^ "Albertsons-Safeway outlines new operations, leadership". Supermarket News. September 19, 2014. 
  8. ^ Mark Albright (August 6, 2002). "Stores get less possessive". St. Petersburg Times. Retrieved October 16, 2014. 
  9. ^ "Traditions & History". Albertsons. Retrieved 4 October 2014. 
  10. ^ SEC Filings: SuperValu
  11. ^ Albertsons to close 100 of its stores Deseret News (Salt Lake City), June 8, 2006
  12. ^ Albertson's LLC to Close Shutter Online Shopping Service Progressive Grocer/AllBusiness.com, Thursday, July 13, 2006
  13. ^ Albertsons says it's "crazy"[dead link]
  14. ^ Albertsons to discontinue loyalty cards today, The Arizona Republic, June 20, 2007.
  15. ^ Albertsons's ditches loyalty cards, Dallas News.com, Wednesday, September 27, 2007.
  16. ^ a b c Albertsons is sold in Northern California AllBusiness, November 28, 2006
  17. ^ Albertsons to close nine stores, Rocky Mountain News, January 20, 2007.
  18. ^ Albertsons closing 5 Denver-area stores, Denver Business Journal, August 25, 2009.
  19. ^ Jennifer Rich (2012-04-11). "Albertsons to close 13 Florida stores". The Bradenton Herald. Retrieved 2012-04-11. 
  20. ^ a b Nash Finch to Buy Rapid City Albertsons, Rapid City Journal, February 15, 2008.
  21. ^ Albertson's is leaving Oklahoma, The Dallas Morning News, June 20, 2007.
  22. ^ Albertsons to close 6 D-FW stores, The Dallas Morning News, January 29, 2007.
  23. ^ Albertson's LLC to Acquire Raley's New Mexico Stores, PR Newswire, Wednesday, June 13, 2007.
  24. ^ Supervalu will acquire Albertsons stores, The Casper Star Tribune, December 20, 2007.
  25. ^ Publix buying 49 Albertsons Stores AllBusiness Monday, June 9, 2008
  26. ^ a b SuperValu announces sale of Albertsons stores in Utah[dead link]
  27. ^ "Albertsons to close 26 U.S. stores". The Los Angeles Times. September 5, 2012. Retrieved September 7, 2012. 
  28. ^ "SUPERVALU Announces Definitive Agreement for Sale of Five Retail Grocery Banners to Cerberus-Led Investor Group". Supervalu. January 9, 2013. Retrieved January 14, 2013. 
  29. ^ "Albertson’s LLC to Acquire United Supermarkets LLC". Albertson’s LLC. September 9, 2013. Retrieved February 13, 2014. 
  30. ^ "FTC gives final approval for United-Albertsons merger". Amarillo Globe-News. February 4, 2014. Retrieved February 13, 2014. 
  31. ^ "Serving Texans in the Texas tradition.". United Texas, LLC. Retrieved 2014-02-13. 
  32. ^ Reuters (February 21, 2014). "Cerberus in advanced talks to buy Safeway". Reuters. Retrieved 2014-02-21. 
  33. ^ "Albertsons Owner to Buy Safeway for More than $9 Billion". NBC News. March 6, 2014. 
  34. ^ "Big Changes are Coming!". Retrieved June 26, 2013. 
  35. ^ "AlbertsonsMkt for iPhone, iPod touch, and iPad on the iTunes App Store". Retrieved June 26, 2013. 
  36. ^ "Albertsons Card Free Savings". Albertsons.com. June 2013. Retrieved 2014-03-07. 

External links[edit]