Albertsons Companies Inc. is an American grocery company founded and based in Boise, Idaho.
In January 2015, it acquired Safeway Inc. for $9.2 billion. The newly merged company has more than 2,200 stores and over 250,000 employees, which makes it the second largest supermarket chain in North America after Kroger, which has 2,424 stores. 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 as 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.
History
Beginnings
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.
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
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
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
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.,was 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)
- 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
Following the sale, Albertson's, Inc., was removed from the NYSE. Albertsons LLC was the successor company to Albertsons according to SEC filings. New Albertsons Inc. assumed most of the debt but got most of the stores.
The five Albertsons Inc. divisions that remained as 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. 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. 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." 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. In September, 2007, all Albertsons stores in the Dallas/Fort Worth, Texas, and Florida markets began collecting their Albertsons Preferred Savings Cards.
In 2008, New Albertsons divested Bristol Farms to its senior management.
Sales and store closures
In November 2006, Save Mart Supermarkets acquired Albertsons' Northern California and Northern Nevada locations and began operating the stores in February 2007. 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. Most of the Albertsons locations had originally been branded as Lucky before Albertson's 1999 purchase of American Stores.
Between 2006 and 2012, Albertsons announced store closures in several states including Colorado, Florida, Nebraska, Oklahoma, South Dakota, and Texas.
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. 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.
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. In July 2009, SuperValu announced that it was selling 36 of its 43 Utah Albertsons locations to Associated Food Stores. All stores were rebranded as Fresh Market.
In September 2012, SuperValu announced the closure of 26 Albertsons stores in the U.S. as part of a decision to close about 60 stores nationwide.
Sale to Cerberus
On January 10, 2013, it was announced 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
On September 9, 2013, the company acquired Lubbock-based supermarket United Supermarkets LLC. 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. The United Supermarkets family brands include Market Street, Amigos, and United Express.
After the deal was finalized, the Albertsons Market brand was revived for Albertsons stores operated by United. The first to be branded as such opened in Alamogordo, New Mexico in 2015.
Safeway acquisition
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. On March 6, 2014, Cerberus (parent company of Albertsons) announced they would purchase Safeway for $9.4 billion in a deal expected to close in the 4th quarter of the year.
On July 25, 2014, Safeway stockholders approved the merger with Albertsons.
In December 2014, Albertsons announced that the Haggen Company, a Bellingham, WA based grocery chain, was buying 146 Safeway, Albertsons and Vons stores, as required by the antitrust review of the merger.
On January 30, 2015, Albertsons officially acquired Safeway Inc. after being cleared by the FTC, thus giving it control of the Safeway store banners, including Randalls, Tom Thumb, Carrs Safeway, Vons, and Pavilions. Following the merger, Albertsons announced the new company would have 14 divisions led by three regional offices.
- Acme Division: East Region, existing Acme Markets (based in Malvern, PA)
- Eastern Division: East Region, existing Eastern Division of Safeway (based in Lanham, MD)
- Shaw's Division: East Region, existing Shaw's/Star Market (based in West Bridgewater, MA)
- Jewel-Osco Division: East Region, existing Jewel-Osco (based in Itasca, IL)
- Portland Division: North Region, existing Safeway Portland division with Albertsons stores from Northwestern
- Denver Division: North Region, existing Safeway Denver division with Albertsons stores from Intermountain
- Intermountain Division: North Region, existing Albertsons division with some Safeway stores from Seattle Division
- Northern California Division: North Region, existing Safeway division (based in Pleasanton, CA)
- Seattle Division: North Region, existing Safeway division with some Albertsons stores from Northwestern
- Southwest Division: South Region, merged Southwest Safeway and Albertsons divisions
- Southern Division: South Region, existing Albertsons South division but with Tom Thumb stores (based in Fort Worth, TX)
- Houston Division: South Region, existing Randalls/Tom Thumb Food & Pharmacy division from Safeway, though with South's Florida stores and southern Louisiana stores instead of Tom Thumb (based in Houston, TX)
- Southern California Division: South Region, merged Vons Safeway division with Albertsons division (based in Fullerton, CA)
- United Division: South Region, existing United division (based in Lubbock, TX)
Going public
After several months of rumors, the combined operation announced it would go public as Albertsons Companies, Inc. Albertsons attempted to IPO with the ticker ABS on October 14, 2015, planning to raise as much as $1.7 billion, selling 65.3 million shares with a range of $23 - $26 per share. However, the company postponed the listing due to market conditions, particularly after Wal-Mart warned of more challenged sales earlier that day. Albertsons has reportedly postponed the IPO indefinitely, as of October 2015.
Chains
Prior to the merger with Safeway, Albertsons operates stores under the following banners:
- ACME 112 locations (DE, MD, NJ, PA)
- Albertsons 594 locations (AZ, NM, CO, TX, LA, AR, FL, CA, ID, MT, ND, NV, OR, UT, WA and WY)
- Amigos 4 locations (TX)
- Jewel-Osco 182 locations (IL, IA, and IN)
- Lucky 5 locations (CA and NV)
- Market Street 12 locations (TX)
- Osco and Sav-on 722 pharmacies (Nationwide)
- Shaw's and Star Market 169 locations (MA, ME, NH, RI and VT)
- Super Saver Foods 2 locations (UT)
- United Supermarkets 37 locations (TX)
On July 20, 2015, the company announced its plans to acquire 76 stores owned by A&P in 4 states, to be rebannered as ACME. If this acquisition takes place, it would mean a return of the company to New York and Connecticut after absences of several years.
Brands
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.
After its purchase of Safeway, Albertsons began replacing some of its brands with Safeway's. O Organics and Open Nature replaced Wild Harvest, Pantry Essentials replaced Shoppers Value while Refreshe replaced Super Chill. By late 2015, its remaining store brands will be replaced with "Signature".
Technology
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 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. While its website consolidation appeared to take place as expected, its applications received bad reviews -- 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.
Since its acquisition of United Supermarkets, the Albertsons Market brand was revived, and its Facebook and Twitter pages were re-opened.
Preferred Savings Card
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. The cards briefly continued in Southern California stores before being discontinued in July 2013.
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