Albertsons (SuperValu)

For other uses, see Albertsons.

New Albertson's, Inc.

Type	Subsidiary of SuperValu
Industry	Retail
Founded	1939 (Boise, Idaho)
Headquarters	Boise, Idaho
Number of locations	453
Key people	Craig Herkert, CEO Mike Jackson, President and COO Pete Van Helden, Senior Vice President; President, Retail West
Products	Bakery, dairy, deli, frozen foods, grocery, meat, pharmacy, produce, seafood, snacks, liquor, gas
Parent	SuperValu Inc.
Website	Albertsons.com

Albertsons is a supermarket chain that operates 463 grocery stores in Washington, Oregon, Idaho, Montana, Wyoming, Louisiana, Nevada, Southern California, Florida and certain parts of Utah.^[1] Supermarket News ranked parent company SuperValu number five in the 2007 "Top 75 North American Food Retailers".^[2] Albertsons is a wholly owned subsidiary of Eden Prairie, Minnesota-based SuperValu Inc.

History

Beginning

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, even an ice cream shop. The store was located at 17th and State Streets, a few blocks north 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; in 1964, Albertson opened his 100th store, in Seattle. In 1966, Albertsons expanded to southern California by acquiring Great All American Stores, 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 but 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. Albertson's 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 smoothly 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 Columbia, Missouri and Springfield, Missouri markets; 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 and Super One chains were closed and the buildings sold.

American Stores

An Albertsons in Boise, Idaho.

An Albertsons in Torrance, California.

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.

Company Problems

In 2004 Albertsons Drug Managers filed a class action lawsuit Scott Cole & Associates: Albertsons Class Action. Scott Cole & Associates, APC filed the action for violations of California's overtime laws their behalf. The action settled for $2.35 Million, representing one of the highest per-work week settlements in the state at the time.

2000s

In 2001, Albertsons sold its freestanding Osco Drug stores in the northeastern states to Jean Coutu Group, a Canadian drug store company. Also, Albertsons began issuing Albertsons Preferred Savings Cards. 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.

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 the area's second top grocer to H-E-B. At the time of the withdrawal, the 44-store H-E-B chain held a commanding 61 market share, while Albertsons held a 15 market share. Albertsons was the area's third top grocer before 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 market share, Kroger's 15 area stores a 13.7 share, and Albertsons 10 stores a 13.1 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.

Also in 2004, Albertsons exited the markets of Omaha, Nebraska, and New Orleans, Louisiana, closing over 20 stores.

In 2010, Brookshire's, having acquired 4 Albertsons stores in 2002, pulled out of the Mississippi market by closing 2 stores and selling 2 other stores to Kroger.

Sale to SuperValu, CVS, and Cerberus

In 2005, Albertsons put itself up for sale, due to not being able to compete with other chains. Several companies interested were The Kroger Co. and SuperValu Inc., these companies were interested in the supermarket chains, whereas The Walgreen Co., CVS Corporation, and Rite Aid were interested in purchasing the Osco and Sav-on drugstore chains.

On January 23, 2006, SuperValu Inc., CVS Corporation, and an investment group led by Cerberus Capital Management announced they had agreed to acquire Albertsons for $17.4 billion in cash, stock and debt assumption.

As of June 2, 2006, the company's retail stores have been 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.
  • 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 (188 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 (later sold to SuperValu)) - 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)

The agreement also included terms for dividing up distribution centers and other real estate and support operations, as well as the sale of 26 Chicago-area Cub Foods from SuperValu to the Cerberus-led investor group. Cerberus has closed the Cub Foods locations and sold most of them to other operators.

After Acquisition

SuperValu has publicly stated that Albertsons will continue to have a presence in Boise, Idaho, for a three-year period from the date of acquisition, but has not stated which functions will remain permanently in Boise, Idaho, or transitioned to Eden Prairie, Minnesota.

Albertson's, Inc., is no longer a separate publicly traded company and has been removed from the NYSE. Albertsons will only exist as a nameplate for the grocery stores acquired by SuperValu and Cerberus. New Albertson's, Inc., has become the successor company to Albertsons according to SEC filings.^[3] Albertsons LLC was also formed as part of the reorganization of assets and liabilities and will eventually be led by the Cerberus group.

In 2007, Albertsons created the "Crazy About Food" slogan and campaign. At the same time, they announced they no longer needed 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."^[4]

On July 28, 2009, SuperValu announced that it was selling 36 of its 43 Utah Albertson's locations to Associated Food Stores, and is seeking a buyer for 4 others. All stores will be re-branded "Fresh Market". Only the 3 stores located near St. George and in Tooele, Utah will remain branded as Albertson's.^[5]

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 (founder Joe's mother's name). 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. Currently, store brand items in Albertsons stores include Albertsons, Shoppers Value, Homelife, Culinary Circle, Whole Care Pet, Baby Basics, Java Delight, Farm Fresh, Arctic Shores, Stockman & Dakota, Flavorite, Stone Ridge, Super Chill, and Wild Harvest, the latter of which is SuperValu's in-house organic and natural foods label.

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 system has since been removed from some stores.

Albertsons offer (in certain areas) its customers the option to shop from home via the company's website, www.albertsons.com. 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 eleven different health categories.

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. Only the SuperValu Owned Albertsons stores continue to use the Preferred Savings Cards, as the Albertsons LLC stores discontinued them after September 2007. March 08,2011 Southern California Albertsons (Albertsons LLC) is still using the Preferred Savings Card.

Albertsons launched a gas rewards program at the start of 2009. Every time customers spend $50 using their Preferred Savings card they will earn a discount of 5 cents off per gallon of gasoline at any Albertsons Express Gas Station. Customers can earn up to $1.50 off per gallon of gasoline or diesel (up to 20 gallons) in a rolling 30 day period. Savings greater than $1.50 per gallon may be redeemed at the customer's next purchase.

In the Community

Albertsons offered a way for all non-profit youth oriented organizations to earn money. This program was called "Community Partners." Members of an organization could link their Preferred Savings Card to an organizations number. Albertsons then gave the organization a percentage of the sales used with the card. They ended the program on May 1, 2010.^[6]

References

1. ^ Albertsons: http://www.supervalu.com
2. ^ 2007's Top 75 North American Food Retailers: Supermarket News
3. ^ SEC Filings: SuperValu
4. ^ Albertsons says it's "crazy"
5. ^ SuperValu announces sale of Albertsons stores in Utah
6. ^ "Albertson's discontinues Community Rewards program". Albertson's. 2010-05-01. http://www.albertsons.com/cp/. Retrieved 7/5/2010. 

External links

• Albertsons Homepage
• The New SuperValu, summarizing the impact of the Albertsons acquisition
• Albertsons History, Albertsons historical summary