Supermarket Predictions 2025

[pseudo3d]

16. I do believe they'll try to sell S&S first before dissolving it, but without S&S, what is Ahold Delhaize going to do? Keep the supermarket chains they have as overseas investments? Make Food Lion the bread and butter of the company?

Ahold has had a bit of a rocky road with its historical US operations. Bruno's, Bi-Lo and Tops all were sold. They also had the big accounting scandal with US Foods. It seems that Ahold's operations seem to come back to the northeast with the two Giants and Stop and Shop. Stop and Shop stuck with their huge stores too long and never down sized when those huge stores for a traditional grocer went out of style. Giant-MD never went in on those huge 75k+ stores. I'm curious to know how Food Lion and Hannaford do as compared to what Ahold brought to the table. Food Lion has a lot of rural penetration and in many places they are the only traditional grocery in town. I've heard that Giant-PA is the cash cow of the historical Ahold USA operations. As long as the chains outside Stop and Shop are doing okay, why dump the whole thing? Personally, I'd try to offload the best Stop and Shop locations to other operators like Acme, Shop Rite, international/ethnic or some of the other co-ops around NYC. Beyond that, I think it is time to say goodbye to Stop and Shop. Would Kroger want the whole chain to grab the northeast? Buy Stop and Shop, sell off or close the badly burned parts and try to make a go of the rest? How would Kroger do with heavy competition from Shop Rite and the other NYC area co-ops plus now competing against their former stablemate Hannaford?

Royal Ahold only owned Bruno's for four years; it was clear that Bruno's bankruptcy had not been good to the supermarket chain and Ahold either wasn't willing or couldn't offer any resources to save it. (Not sure about BI-LO, they owned it longer and was clearly the better performing of the two—and both BI-LO/Bruno's and Tops were victims of the accounting scandal fallout). Stop & Shop, meanwhile, was integrated fully with Giant-MD from 2004 to 2011, and it seems that despite Stop & Shop being at the helm of that, Stop & Shop suffered more (maybe it was the logo).

I've said before that Royal Ahold and Delhaize did not merge for their benefit of the American operations, but if you look at them without Food Lion, on paper you see a bunch of stores stretching from Northern Virginia up to Maine, which sounds like a solid regional grocery operation of nearly 1,000 stores (940). It's much less impressive when these are all separate operations with their own programs, brands, and management. I've heard some nice things about Hannaford, for instance (especially in comparison with Shaw's, which is clearly in a second-place position in markets where they compete)...but that can't be applied to all divisions. Kroger and Albertsons obviously have divisions better than others, but Stop & Shop is no Hannaford.

The problem with getting rid of Stop & Shop is that still accounts for around 40% of their non-Food Lion holdings and leaves a big hole in their operations, and while the other three supermarket chains are healthy enough to continue it begins to create questions if Ahold Delhaize should even hold onto their American operations, especially if whatever income from selling Stop & Shop is sent back to Europe rather than being reinvested in the rest of the American operations. (That's assuming that nothing weird happens like Ahold Delhaize goes back to looking to combine with Albertsons again).

4. Kroger will exit California; private equity who may already be in the SoCal market will buy Ralphs; F4L chain will dissolve itself with various operators taking pieces of it being managed by C&S and franchisees of F4L may expand. C&S will establish a SoCal warehouse as part of this.

No, Kroger isn't losing money on California.

If Ralphs was actually losing money, then that would be it—chances of being sold would be bleak and the more likely scenario would be that Kroger would sell the stores it could (Stater Bros., Vons/Albertsons) and close the rest, essentially a Dominick's scenario.

I've never been to a Ralphs but it sounds like it's continually drifting apart from the rest of the Kroger operation, with small, expensive stores and a brand that's going nowhere fast. If Kroger exits California now, they could sell it as a complete brand with operational stores, then use that money to invest in the rest of the chain.

[HCal]

Kroger can exit California and push resources on markets with population growth AND Kroger growth. California is not having Kroger growth, there is no point in staying there, leave, take the money and invest in population growth markets that work for Kroger. And figure out a way to address Fred Meyer and QFC to get some new store growth out of those two chains, so those two chains don't suffer the same fate as Ralphs has.

Ralphs is one of Kroger's largest divisions. They have a commanding market share in the second-largest metro area in the country. Their stores are usually busier than the competition. What would be the logic of exiting this market?

Albertsons has to do something with pricing. It is out of control (see my Jewel vs. NorCal pricing thread). This cannot continue. I'm not saying they need to compete with Wal Mart (or even Kroger) but they have got to get closer to Kroger's pricing in all of their markets. If they can't make it work, they need to exit markets where it won't work. If supplying Reno from Tracy, CA costs SO MUCH MORE for products than Smiths who supplies Reno from double the distance away out of Layton, UT/Las Vegas, NV, then it isn't working and it is time for Safeway to exit Reno. I suspect there are other markets with similar pricing issues. They need to figure this out.

As long as people are willing to pay these prices, I don't see the issue. I'm not sure what is happening in NV, but in California, the higher prices don't seem to be harming them. Some people bring the prices down through judicious use of the Just4U program, others are less price-sensitive and just pay what is asked. Sometimes it's better to compete on other things besides price.

[storewanderer]

There is some kind of grocery strategy but it doesn't seem much different to me than it has in a lot of years... we will see how many of the new stores they open as Super Targets. I looked at my Reno (Greatland) and Sparks (2010's) Target builds and both are around 145k square feet. These new stores they are building are around 149k square feet. I don't think 4k is enough to add grocery; it sounds like enough to add a luxurious larger "pick up" and "order fulfillment" area.

I don't think that Target can say 145k sq feet is too small for full grocery when Walmart is operating Supercenters in 120k square foot buildings. Heck, there is a former Home Depot Expo Design Center near me that Walmart purchased and opened as a Supercenter. Sure, the depth of selection in the grocery aisles is less than a larger Supercenter and there isn't a service deli or bakery. However, they have full produce, meat and dairy. You can do a full grocery shop in this Walmart. The store is busy whenever I visit. Walmart hasn't done much with mixed use development but they do seem to be able to adapt to smaller size buildings pretty well to get in Supercenters if they desire to. Contrast that with Target where you have these huge Greatland model stores that already have a huge PFresh grocery selection on one side with the pharmacy at the front. Move the pharmacy to the middle of the store with a condensed clothing section. That gives you a space to install produce and some sort of bakery and deli where the pharmacy was located. Given what ClownLoach says about the backroom size, there shouldn't be a problem adding holding for produce and additional refrigerated and frozen. At least the store will seem fully utilized instead of all spread out like they are trying to fill space. There has to be a will and a desire, whether it is going towards full grocery or fixing what is broken in their current model. What I see in the DC suburbs are consistently busy to packed Walmart stores, even the few that are not Supercenters. Target on the other hand is light on customers where they would have been very busy themselves 5 or more years ago. I live in the prime area for "Tar-jay" type shoppers yet Target can't seem to pull them in anymore.

They had extra room in the back, until they did these remodels to many Greathouse Stores that reallocated that excess space to mail order fulfillment and to building a larger office for management.

But whatever they need to do, they need to figure out how to get grocery into these boxes. Where does the space go in these Targets? Wal Mart has similar size boxes with supercenters, garden, and auto lube bays... and way larger depth of SKUs. Target must have some really nice offices in their stores.

[ClownLoach]

There is some kind of grocery strategy but it doesn't seem much different to me than it has in a lot of years... we will see how many of the new stores they open as Super Targets. I looked at my Reno (Greatland) and Sparks (2010's) Target builds and both are around 145k square feet. These new stores they are building are around 149k square feet. I don't think 4k is enough to add grocery; it sounds like enough to add a luxurious larger "pick up" and "order fulfillment" area.

I don't think that Target can say 145k sq feet is too small for full grocery when Walmart is operating Supercenters in 120k square foot buildings. Heck, there is a former Home Depot Expo Design Center near me that Walmart purchased and opened as a Supercenter. Sure, the depth of selection in the grocery aisles is less than a larger Supercenter and there isn't a service deli or bakery. However, they have full produce, meat and dairy. You can do a full grocery shop in this Walmart. The store is busy whenever I visit. Walmart hasn't done much with mixed use development but they do seem to be able to adapt to smaller size buildings pretty well to get in Supercenters if they desire to. Contrast that with Target where you have these huge Greatland model stores that already have a huge PFresh grocery selection on one side with the pharmacy at the front. Move the pharmacy to the middle of the store with a condensed clothing section. That gives you a space to install produce and some sort of bakery and deli where the pharmacy was located. Given what ClownLoach says about the backroom size, there shouldn't be a problem adding holding for produce and additional refrigerated and frozen. At least the store will seem fully utilized instead of all spread out like they are trying to fill space. There has to be a will and a desire, whether it is going towards full grocery or fixing what is broken in their current model. What I see in the DC suburbs are consistently busy to packed Walmart stores, even the few that are not Supercenters. Target on the other hand is light on customers where they would have been very busy themselves 5 or more years ago. I live in the prime area for "Tar-jay" type shoppers yet Target can't seem to pull them in anymore.

Tonight I walked a nearly 160,000 square foot Super Target. If you saw the size of the multiple stock rooms you would have a stroke. The entire back wall - that is the long one - is a full 40 foot deep stock room end to end with 20 ft tall racking. And the front wall on the home side is also hiding another big stock room large enough to hold an entire 53 foot trailer load. And this is a Super location. They also have multiple food stock rooms and giant walk ins. I have to estimate that nearly 50,000 square feet of this building that is in the top 10 in the organization in volume is storage, offices, or other non sales facilities.

I also looked at the pictures of the old La Habra Target on Imperial Hwy and Harbor that is now a Walmart. This is a classic small Target and it closed in a relocation a few blocks west to a much larger store. Walmart did not enlarge the store and it is a full supercenter with the new remodel. Looks very tight inside - it doesn't have room for the massive stack outs on the racetrack by food for example - but it is a full super Walmart in a "traditional smaller size" Target probably 105K. So there is absolutely zero excuse for Target to keep running this way.

[ClownLoach]

There is some kind of grocery strategy but it doesn't seem much different to me than it has in a lot of years... we will see how many of the new stores they open as Super Targets. I looked at my Reno (Greatland) and Sparks (2010's) Target builds and both are around 145k square feet. These new stores they are building are around 149k square feet. I don't think 4k is enough to add grocery; it sounds like enough to add a luxurious larger "pick up" and "order fulfillment" area.

I don't think that Target can say 145k sq feet is too small for full grocery when Walmart is operating Supercenters in 120k square foot buildings. Heck, there is a former Home Depot Expo Design Center near me that Walmart purchased and opened as a Supercenter. Sure, the depth of selection in the grocery aisles is less than a larger Supercenter and there isn't a service deli or bakery. However, they have full produce, meat and dairy. You can do a full grocery shop in this Walmart. The store is busy whenever I visit. Walmart hasn't done much with mixed use development but they do seem to be able to adapt to smaller size buildings pretty well to get in Supercenters if they desire to. Contrast that with Target where you have these huge Greatland model stores that already have a huge PFresh grocery selection on one side with the pharmacy at the front. Move the pharmacy to the middle of the store with a condensed clothing section. That gives you a space to install produce and some sort of bakery and deli where the pharmacy was located. Given what ClownLoach says about the backroom size, there shouldn't be a problem adding holding for produce and additional refrigerated and frozen. At least the store will seem fully utilized instead of all spread out like they are trying to fill space. There has to be a will and a desire, whether it is going towards full grocery or fixing what is broken in their current model. What I see in the DC suburbs are consistently busy to packed Walmart stores, even the few that are not Supercenters. Target on the other hand is light on customers where they would have been very busy themselves 5 or more years ago. I live in the prime area for "Tar-jay" type shoppers yet Target can't seem to pull them in anymore.

They had extra room in the back, until they did these remodels to many Greathouse Stores that reallocated that excess space to mail order fulfillment and to building a larger office for management.

But whatever they need to do, they need to figure out how to get grocery into these boxes. Where does the space go in these Targets? Wal Mart has similar size boxes with supercenters, garden, and auto lube bays... and way larger depth of SKUs. Target must have some really nice offices in their stores.

See my comment above. Even those Greatland stores have silly stupid amounts of space even with fulfillment centers. Target has more damn inventory in the back room than on the floor.

[ClownLoach]

16. I do believe they'll try to sell S&S first before dissolving it, but without S&S, what is Ahold Delhaize going to do? Keep the supermarket chains they have as overseas investments? Make Food Lion the bread and butter of the company?

Ahold has had a bit of a rocky road with its historical US operations. Bruno's, Bi-Lo and Tops all were sold. They also had the big accounting scandal with US Foods. It seems that Ahold's operations seem to come back to the northeast with the two Giants and Stop and Shop. Stop and Shop stuck with their huge stores too long and never down sized when those huge stores for a traditional grocer went out of style. Giant-MD never went in on those huge 75k+ stores. I'm curious to know how Food Lion and Hannaford do as compared to what Ahold brought to the table. Food Lion has a lot of rural penetration and in many places they are the only traditional grocery in town. I've heard that Giant-PA is the cash cow of the historical Ahold USA operations. As long as the chains outside Stop and Shop are doing okay, why dump the whole thing? Personally, I'd try to offload the best Stop and Shop locations to other operators like Acme, Shop Rite, international/ethnic or some of the other co-ops around NYC. Beyond that, I think it is time to say goodbye to Stop and Shop. Would Kroger want the whole chain to grab the northeast? Buy Stop and Shop, sell off or close the badly burned parts and try to make a go of the rest? How would Kroger do with heavy competition from Shop Rite and the other NYC area co-ops plus now competing against their former stablemate Hannaford?

Royal Ahold only owned Bruno's for four years; it was clear that Bruno's bankruptcy had not been good to the supermarket chain and Ahold either wasn't willing or couldn't offer any resources to save it. (Not sure about BI-LO, they owned it longer and was clearly the better performing of the two—and both BI-LO/Bruno's and Tops were victims of the accounting scandal fallout). Stop & Shop, meanwhile, was integrated fully with Giant-MD from 2004 to 2011, and it seems that despite Stop & Shop being at the helm of that, Stop & Shop suffered more (maybe it was the logo).

I've said before that Royal Ahold and Delhaize did not merge for their benefit of the American operations, but if you look at them without Food Lion, on paper you see a bunch of stores stretching from Northern Virginia up to Maine, which sounds like a solid regional grocery operation of nearly 1,000 stores (940). It's much less impressive when these are all separate operations with their own programs, brands, and management. I've heard some nice things about Hannaford, for instance (especially in comparison with Shaw's, which is clearly in a second-place position in markets where they compete)...but that can't be applied to all divisions. Kroger and Albertsons obviously have divisions better than others, but Stop & Shop is no Hannaford.

The problem with getting rid of Stop & Shop is that still accounts for around 40% of their non-Food Lion holdings and leaves a big hole in their operations, and while the other three supermarket chains are healthy enough to continue it begins to create questions if Ahold Delhaize should even hold onto their American operations, especially if whatever income from selling Stop & Shop is sent back to Europe rather than being reinvested in the rest of the American operations. (That's assuming that nothing weird happens like Ahold Delhaize goes back to looking to combine with Albertsons again).

4. Kroger will exit California; private equity who may already be in the SoCal market will buy Ralphs; F4L chain will dissolve itself with various operators taking pieces of it being managed by C&S and franchisees of F4L may expand. C&S will establish a SoCal warehouse as part of this.

No, Kroger isn't losing money on California.

If Ralphs was actually losing money, then that would be it—chances of being sold would be bleak and the more likely scenario would be that Kroger would sell the stores it could (Stater Bros., Vons/Albertsons) and close the rest, essentially a Dominick's scenario.

I've never been to a Ralphs but it sounds like it's continually drifting apart from the rest of the Kroger operation, with small, expensive stores and a brand that's going nowhere fast. If Kroger exits California now, they could sell it as a complete brand with operational stores, then use that money to invest in the rest of the chain.

For Ralphs - their estimated volume is only about $3 Billion per year, or a meager 2% of the chain. Their revenue when acquired by Kroger was over $5B and adjusting for inflation that was $10B a year.

So since Kroger took over, Ralphs has lost 70% of its revenue, maybe more when adjusted for inflation.

[storewanderer]

Tonight I walked a nearly 160,000 square foot Super Target. If you saw the size of the multiple stock rooms you would have a stroke. The entire back wall - that is the long one - is a full 40 foot deep stock room end to end with 20 ft tall racking. And the front wall on the home side is also hiding another big stock room large enough to hold an entire 53 foot trailer load. And this is a Super location. They also have multiple food stock rooms and giant walk ins. I have to estimate that nearly 50,000 square feet of this building that is in the top 10 in the organization in volume is storage, offices, or other non sales facilities.

I also looked at the pictures of the old La Habra Target on Imperial Hwy and Harbor that is now a Walmart. This is a classic small Target and it closed in a relocation a few blocks west to a much larger store. Walmart did not enlarge the store and it is a full supercenter with the new remodel. Looks very tight inside - it doesn't have room for the massive stack outs on the racetrack by food for example - but it is a full super Walmart in a "traditional smaller size" Target probably 105K. So there is absolutely zero excuse for Target to keep running this way.

The Greatland backrooms are similar to what you describe (maybe not quite as deep though).

I am not sure the backrooms in the later builds are the same. Sparks is like this. It has the backroom on the side wall (grocery side wall). This backroom seems a lot smaller but I could be wrong. It also has what I perceive to be a gigantic office/break room area up front, but it may not be as large as I think it is.

I've spent some time in a large 2000's era Super Target backroom and saw their backrooms and observed a lot of space all around. I was thinking how a segway or scooter would be great to get around it faster since it was so big and stuff was spread all around. This was back when they had employees stationed back there all day to do "picks" and every item had its own bin location for overstock and an employee was out on the floor scanning outs all day and the backroom employees were pulling outs to fill all day. Back when Target pushed for operational excellence. Also various "large" areas in grocery to run full fresh perimeter departments that weren't being utilized effectively (even thought the store I saw this in was a very high grocery volume store).

[storewanderer]

For Ralphs - their estimated volume is only about $3 Billion per year, or a meager 2% of the chain. Their revenue when acquired by Kroger was over $5B and adjusting for inflation that was $10B a year.

So since Kroger took over, Ralphs has lost 70% of its revenue, maybe more when adjusted for inflation.

I am just thinking in terms of Kroger's history in California.

Fry's chain in California- they failed despite that the chain was founded in California, and left. It should have had promise but I don't know what happened, they still left. And they left after Alpha Beta had gone away from the market and as Safeway was heavily upgrading its stores in the NorCal market. It seems like they also had issues competing with Raleys and obviously wouldn't compete with Lucky on price. So I think this was a situation where they could have kept Fry's California, added new stores in growing areas (such as Sacramento which they were not in), but rather than do what they needed to do they just let the thing wither away and sold it to Save Mart. I also heard Fry's California had a reputation for high prices.

Ralphs NorCal- again they failed and left. Though this failure was on Ralphs SoCal based management making dumb decisions on pricing/remodels, along with the dumb decision to ultimately close vs. keep the stores and fix pricing/market them better, it is still a failure and was still under Kroger's watch. The Sacramento market was again growing at this point in time (like a weed) and Ralphs could have been a significant part of that growth, even had 3 new build stores that had promising sales trends, but didn't matter, still closed them down. Nugget deeply thanks Ralphs for this dumb market exit move.

Now the situation of Ralphs SoCal- great asset, many very profitable stores, a chain with a strong name/reputation, good logo, yet the mismanagement by Kroger of closing too many stores, not opening new stores in the past decade or more, not adding stores in growing parts of SoCal, has really cost Ralphs a lot of ground. I don't see it getting any better under Kroger in the future as Kroger seems to have made it clear they love to open stores in places like TX, AZ, CO, UT, OH, etc., but do not seem to much like opening stores in CA. I really think under different ownership Ralphs could become great again. I think it could enhance its operational standards back to what they were pre-Kroger, get a Ralphs private label back, and start to add stores again. I think a focused local management could make the fresh fare format a distinct upscale format and a focused local management that was operating like a regional chain could do more higher quality meat/produce buys since they'd be buying for a smaller block of stores as opposed to involvement with Kroger who is doing these giant buys of fresh products and maybe can't access the smaller/higher quality producers due to those smaller producers not being able to supply 2,500 stores.

So as I see it, Kroger should just leave California. It is profitable? Great- that means the sale price for the asset will be even higher. That will give them even more money to invest in those assets in places like TX, AZ, CO, UT, OH, etc. that they seem to like to invest in for new stores. And they will quit having an operation that is failing to grow with its market and on a constant store count decline (Ralphs) which is not consistent with how the rest of Kroger operates (in growing markets, Kroger grows with the markets, and Kroger's rate of store closures is quite low). And this time Kroger needs to leave California and not come back.

[ClownLoach]

For Ralphs - their estimated volume is only about $3 Billion per year, or a meager 2% of the chain. Their revenue when acquired by Kroger was over $5B and adjusting for inflation that was $10B a year.

So since Kroger took over, Ralphs has lost 70% of its revenue, maybe more when adjusted for inflation.

I am just thinking in terms of Kroger's history in California.

Fry's chain in California- they failed despite that the chain was founded in California, and left. It should have had promise but I don't know what happened, they still left. And they left after Alpha Beta had gone away from the market and as Safeway was heavily upgrading its stores in the NorCal market. It seems like they also had issues competing with Raleys and obviously wouldn't compete with Lucky on price. So I think this was a situation where they could have kept Fry's California, added new stores in growing areas (such as Sacramento which they were not in), but rather than do what they needed to do they just let the thing wither away and sold it to Save Mart. I also heard Fry's California had a reputation for high prices.

Ralphs NorCal- again they failed and left. Though this failure was on Ralphs SoCal based management making dumb decisions on pricing/remodels, along with the dumb decision to ultimately close vs. keep the stores and fix pricing/market them better, it is still a failure and was still under Kroger's watch. The Sacramento market was again growing at this point in time (like a weed) and Ralphs could have been a significant part of that growth, even had 3 new build stores that had promising sales trends, but didn't matter, still closed them down. Nugget deeply thanks Ralphs for this dumb market exit move.

Now the situation of Ralphs SoCal- great asset, many very profitable stores, a chain with a strong name/reputation, good logo, yet the mismanagement by Kroger of closing too many stores, not opening new stores in the past decade or more, not adding stores in growing parts of SoCal, has really cost Ralphs a lot of ground. I don't see it getting any better under Kroger in the future as Kroger seems to have made it clear they love to open stores in places like TX, AZ, CO, UT, OH, etc., but do not seem to much like opening stores in CA. I really think under different ownership Ralphs could become great again. I think it could enhance its operational standards back to what they were pre-Kroger, get a Ralphs private label back, and start to add stores again. I think a focused local management could make the fresh fare format a distinct upscale format and a focused local management that was operating like a regional chain could do more higher quality meat/produce buys since they'd be buying for a smaller block of stores as opposed to involvement with Kroger who is doing these giant buys of fresh products and maybe can't access the smaller/higher quality producers due to those smaller producers not being able to supply 2,500 stores.

So as I see it, Kroger should just leave California. It is profitable? Great- that means the sale price for the asset will be even higher. That will give them even more money to invest in those assets in places like TX, AZ, CO, UT, OH, etc. that they seem to like to invest in for new stores. And they will quit having an operation that is failing to grow with its market and on a constant store count decline (Ralphs) which is not consistent with how the rest of Kroger operates (in growing markets, Kroger grows with the markets, and Kroger's rate of store closures is quite low). And this time Kroger needs to leave California and not come back.

This is an excellent assessment. I do have to wonder if Kroger knows they're in over their heads in California and that was one of the key motivating factors for pursing the merger - they don't have enough stores in the right places and there is a wild range of volumes resulting that moke the chain difficult to manage. Getting all those Vons/Albertsons/Pavilions would have reset the ticking clock on their 3rd place chain and softened the volume range so they would be more consistent from store to store. Now that the merger is dead, in hindsight I think they would have had to take the dangerous leap of moving all of SoCal to a single banner and all of the available names were damaged goods.

I agree with assessments it's profitable, and that is probably another reason for the problems ironically. They culled any store that wasn't highly profitable, and the result is a patchwork quilt of stores with massive coverage gaps. Those gaps have allowed the once dead in the water Albertsons to come back from the grave here as well as the once antiquated, dowdy Stater Bros chain to reinvent itself as the high volume chain Ralphs used to be and overtook them in revenue despite not serving the core LA market.

What now makes SoCal interesting is the quality of operators like Northgate Gonzalez and other ethnic chains that are taking large chunks of market share. The ethnic operators used to just turn the lights back on inside closed, obsolete conventional stores like a dead Ralphs and just redecorate a bit. Although they all have those kinds of stores, now Northgate and also Vallarta are implementing lavish, deluxe remodels and making the kind of investment Ralphs used to make in the community when they were still building the finest mainstream chain stores in SoCal. I do wonder if a operator like Northgate could take on the task of acquiring an under appreciated operation like Ralphs and managing both a mainstream and also Hispanic concept. This would also give them the opportunity to convert some stores to the Northgate format in communities where they would be better served, potentially many of the F4L units that currently make a lame attempt to serve the Hispanic community and generally fail them. As I've stated on other threads, Northgate is capable of consistently designing, building, and operating a store at Wegmans levels which no current California operator can touch - and that store is so successful that it is attracting a diverse audience that is probably only half Hispanic. Plus they would have the ability to get those regional buys as explained above that Ralphs was famous for. For example Ralphs would run their "Ralphs Country Fair" event every summer and there were specific farms named where Ralphs would buy out their entire lot of delicious sweet corn, or other produce and sell it at great prices. These offerings were what elevated the chain - why would you go to Lucky and get "corn" when you can get Olathe Special corn only at Ralphs? It made a giant chain into your local family farm stand. Now they just get whatever commodities Kroger dumps in their warehouse.

[jamcool]

Here are some predictions for Arizona:

1.) Smart and Final decides to pull out of the state or at least Phoenix. They're down to 8 locations statewide. Five in inner ring Phoenix suburbs, 2 in Yuma, and 1 in Bullhead City. They're spending a ridiculous amount of money on advertising (billboards, radio ads, etc. for their 5 store base). They haven't opened up a new store for about a decade and seem to be closing stores when their leases are up.

2.) Raleys does something with Bashas'. Thus far it's been business as (mediocrely) usual at Bashas'. The Bashas' banner is pretty much a dead chain walking in Phoenix / Tucson and AJ's and Food City are just chugging along. I'd expect Raley's to either exit that banner from the urban areas or attempt to try something like a Raley's One concept or even more of a traditional Raley's (with either the Raley's name or the Bashas' name).

3.) Albertsons and Safeway consolidate into one banner. I know that the banner differentiation is mostly Safeway is a union shop and Albertsons is a non-union shop but they haven't opened up a new Albertsons since they re-opened some ex-Haggen stores. All new builds post merger (and there are about a half dozen now) have been under the Safeway banner. The tagline in their ads is also "Serving Arizona since 1928" which is a reference to Safeway's entry into the market. Safeway already has about over 3 times the number of stores (106 Safeway to 30 Albertsons stores). At its peak Albertsons had 60 stores in Arizona.

4.) Kroger starts to purge some Fry's stores. The Fry's chain is overall healthy but there are some absolutely disgusting stores in the fleet in bad neighborhoods that other grocers such as Albertsons, Bashas', Safeway, etc. exited years ago. Kroger has also exited stores in these locations in other markets (or converted them to Food4Less but I don't believe they'll expand that format to Arizona). Overall while I believe Fry's is doing better than Ralph's or QFC I don't believe it's doing as well as it was 5 - 10 years ago. Safeway's resurgence might have to do in part with it but also the addition of Aldi and additional Costco locations has probably hurt Fry's more than any other chain. Unlike most other Kroger divisions, Fry's hasn't really had a purge of stores other than ones that were located nearby other Fry's stores (as a result of the Fry's / Smith's / Smitty's combination in the late 1990s).

5.) Aldi slows expansion. I don't really see Aldi catching on in Arizona like they have in other markets. Especially around my house where I have a choice of Winco or Aldi for a discount grocer. 10/10 times I'll choose Winco. Aldi seems like a novelty store that may have good deals on certain items but the lack of selection and the fact that Arizona grocery prices aren't as ridiculous as other places seems to cause Aldi to lose its luster after the occasional 1 or 2 visits that get customers to "try" the store.

6.) Arizona finally gets a physical Amazon Fresh store. With physical stores opening in other states and a plethora of former grocery store sites to choose from, 2025 seems like as good of a time as any for Amazon to open up a physical location in Arizona.

7.) Sprouts starts to purge some stores. They were founded in the Phoenix area and took over a number of former ABCO Desert Market and Bashas' locations as well as Wildflower Market locations. However, they're overstored in Arizona compared to other markets and I can't Imagine the need for the density that they currently have.

Being acquired by Stater Bros. or Associated/Utah would have been a better situation for Bashas’- Stater being next door in SoCal and having the same competitors, AFS operation of stores in small towns and its own corporate owned stores (Macey’s, Lee’s, Lin’s)seem to be of good quality.