NORTHWEST BASED GROCERY CHAIN THAT BOUGHT ALBERTSONS STORE IN MONROE STRUGGLES IN CALIFORNIA
July 17, 2015
Sign on the old Albertsons Monroe store when it was closed for a day as Haggen's began to clean and re-brand the store. Photo: Sky Valley Chronicle
Former Albertsons store in Monroe as it looked in February after its rebranding as a Haggen NW Fresh store. Photo: Sky Valley Chronicle. CLICK TO ENLARGE
Flyer for Monroe community meeting to meet Hagen leaders in Feb. of this year. Photo: Sky Valley Chronicle. CLICK TO ENLARGE
(MONROE, WA.) -- Haggen Inc., the one time small Bellingham based grocery chain that got big overnight - buying out the Monroe Albertsons store and many other grocery stores up and down the west coast - is going through a baptism by fire in the ultra competitive southern California grocery scene.
Haggen is "laying off employees and cutting worker hours as it struggles to make headway in the highly competitive Southland grocery market," according to a new report in the Los Angeles Times.
Haggen made big news in the grocery industry this year when the one time 18-store grocery chain jumped up to the big time in one fell swoop by buying 146 Albertsons, Vons, Pavillions and Safeway stores.
Eighty-three of those stores are in California, mainly in the south. And much like here in Monroe and elsewhere in Washington state, in California Haggen has spent the past few months converting the stores it bought to the Haggen brand.
But California has turned out to be tough leather to chew on. Bill Shaner, Haggen’s executive in charge of California, Nevada and Arizona, told the Times his company is dealing with “unprecedented” competition in the Southwest and has made "the difficult decision to temporarily cut back on staff hours at our stores."
Haggen has about 10,000 employees total. Shaner did not tell the newspaper how many workers would be affected, nor did the company confirm that there have been any layoffs.
The Times report said some local employees have said some workers have been laid off, including store clerks.
The problem? The Times report indicates that, as in love and war timing is everything.
And in this case Haggen couldn't have picked a worse time to jump into the California grocery market because it is faced with introducing its brand and its stores to customers at a time when, "Grocers are facing heightened competition for food shoppers. Analysts said Southern California is one of the nation’s most competitive grocery markets."
To wit: Farmers markets are popping up everywhere all over the Southland and smaller chains, including Trader Joe’s, also have been expanding while big-box retailers such as Wal-Mart and Target have been scaling up their food offerings.
And if that's not enough, online grocery dabblers like Google and Amazon.com also have been pushing grocery delivery and just last month the German discount grocer Aldi said it planned to open 45 Southland stores starting next March.
In what seems to be a major understatement regarding the uphill climb facing Haggen's in that state, Jim Prevor, a food analyst and founder of PerishablePundit.com told the Times that, “The competitive situation has changed."
In addition to a dog-eat-dog landscape, the Times report notes that Haggen's will go through "growing pains" as it adjusts to running a vastly bigger network of stores in new markets.
Example: Haggen's, "Already has hit some bumps. When its first California stores opened in March, about 1,000 items — or about 2.5% of a store’s products — were erroneously overpriced at 10 supermarkets in Los Angeles, Orange and San Diego counties. A smaller number of goods were incorrectly under priced," according to the Times report.
The story also notes that industry observers think Haggen ultimately will have to make a big decision in California and that is: will it keep its brand as a high-quality grocer with great customer service or will it dilute its reputation if that’s what it takes to succeed in California?
More on the story here .
THE MONROE CHANGE OUT
Just after midnight Thursday Feb. 12 of this year, Haggen took ownership of the Monroe Albertsons store and went to work cleaning, restocking shelves, putting up new signage and other duties necessary to reopen Saturday, Feb. 14 as the first of the 146 stores the chain purchased and began converting to the Haggen banner in the first half of 2015.
Today the Monroe store sports spotless, always clean and polished floors (something not always seen during the Albertsons days) and higher quality produce attractively arranged, long with other new products.
What arguably had been a rather tired, old Albertsons store stuck in 1979 was transformed overnight into a store that more appropriately fits this century.
The once small Bellingham grocery chain had purchased those close to 150 former Safeway and Albertson's operations as part of the divestment process brought about by the Federal Trade Commission’s (FTC) review of the Albertsons LLC and Safeway merger.
The FTC approved the divesture on Tuesday, January 27, 2015, and the merger of Albertsons and Safeway Inc. was completed on Friday, January 30, 2015.
With this acquisition of stores, Haggen's expanded in one giant leap from just 18 stores with 16 pharmacies to 164 stores with 106 pharmacies, from 2,000 employees to more than 10,000 employees, and from a Pacific Northwest company with locations in Oregon and Washington to a major regional grocery chain with locations in Washington, Oregon, California, Nevada and Arizona.
That made Haggen a major new player in the grocery industry overnight. For more details on that see the Chronicle's Feb. 12th feature story here .