Albertsons

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This article is about the stores owned by Supervalu. For the stores now owned by Cerberus Capital Management, see Albertsons LLC.

New Albertson's, Inc.
Type	Subsidiary of Supervalu
Founded	1939 (Boise, Idaho)
Headquarters	Boise, Idaho
Key people	Jeff Noddle, Chairman and CEO Mike Jackson, President and COO Pete Van Helden, Senior Vice President; President, Retail West
Industry	Retail
Products	Bakery, dairy, deli, frozen foods, grocery, meat, pharmacy, produce, seafood, snacks, liquor
Employees	241,000
Parent	Supervalu Inc.
Slogan	Crazy About Food
Website	www.albertsons.com

Albertsons (officially New Albertson's, Inc.), a wholly owned subsidiary of Eden Prairie, Minnesota-based Supervalu, is a supermarket retailer that, at its peak, operated more than 2,500 grocery stores and 700 drug stores under several names in 37 U.S. states with approximately 230,000 associates. Supervalu granted Cerberus a license to continue to operate Cerberus-owned stores under the Albertsons banner. It was ranked number four in sales by Supermarket News — behind Wal-Mart, Kroger and Costco, with only Kroger having more stores.

Contents 1 History 1.1 Beginning 1.2 Partnering with Skaggs 1.3 American Stores 1.4 2000s 1.5 Sale to Supervalu, CVS, Cerberus 1.6 After Acquisition 2 Chains 2.1 Current 2.2 Former 3 Brands 4 Technology 5 Unions 6 Litigation 7 References 8 External links

[edit] History

[edit] 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 Joe 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, Joe opened his 100th store, in Seattle. In 1966, Albertsons expanded to southern California by acquiring All American Stores, a small chain in Orange County.

[edit] Partnering with Skaggs

In 1969, Albertsons partnered with Skaggs Companies, Inc. to create the first combination grocery/drug stores. The partnership was a tremendous success, and was dissolved amicably in 1977, with Skaggs keeping stores in Texas, Oklahoma, and Arkansas, and Albertsons keeping 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 re-bannered 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, 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 Schnuck Markets of St. Louis, Missouri. The former Smitty's and Super One chains were closed and the buildings sold.

[edit] American Stores

In 1999, Albertsons made its biggest acquisition: American Stores Companies, 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. The Lucky stores were converted to the Albertsons banner in November 1999, and the Lucky brand name was retired until April 2006, when Albertsons returned the Lucky brand name to their website due to a dispute with Grocery Outlet.

[edit] 2000s

In 2001, Albertsons sold its free-standing Osco stores in the northeastern states to Jean Coutu Group, a Canadian drug store company. Those stores were rebranded 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 market innovator 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, and pulled out of Houston, closing its 43 area stores leaving them to Kroger and Randalls after entering that market in 1990.

In 2003, Albertsons began issuing Albertsons Preferred Cards.

In 2004, Albertsons acquired Shaw's Supermarkets and Star Market Company from J Sainsbury plc for $2.5 billion.

[edit] Sale to Supervalu, CVS, Cerberus

On January 23, 2006, Supervalu, CVS/pharmacy, 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 closed 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 has acquired all (approximately 702) of the stand-alone Osco Drug and Sav-on Drugs rebranding them all as CVS/pharmacy, though they are closing approximately 100 of the acquired stores. Many CVS locations are close to Sav-On stores.

• The Cerberus-led group acquired:
  • Albertsons (655 locations in Arizona, Northern California, Colorado, Florida, Louisiana, New Mexico, Oklahoma and Texas) - 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.

[edit] 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. ^[1] 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 the announced they no longer needed spokesperson Patricia Heaton. ^[2]

[edit] Chains

[edit] Current

• Acme (134 locations)
• Acme Express, Albertsons Express, and Jewel Express
• Albertsons (964 locations)
• Bristol Farms (11 locations)
• County Line Liquors (1 location)
• Grocery Warehouse (1 location)
• Jewel and Jewel-Osco (200 locations)
• Lazy Acres (1 location)
• Lucky (5 locations)
• Max Foods (2 locations)
• Osco Pharmacy and Sav-on Pharmacy (906 pharmacies)
• Save-A-Lot (2 locations; franchised by Shaw's)
• Shaw's (188 locations)
• Star Market (20 locations)
• Super Saver Foods (23 locations)

[edit] Former

• Osco Drug and Sav-on Drugs (702 locations, rebranded CVS/pharmacy)

[edit] 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 is sold across its chains.

[edit] 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 been removed from stores within recent months, due to shoplifting and a low level of use.

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. Online grocery shopping was discontinued July 21, 2006, in the Cerberus-operated areas of Dallas/Fort Worth, Phoenix, Sacramento and San Francisco Bay, although the service remains at Albertsons stores operated by Supervalu.

[edit] Unions

Albertsons had contracts with the United Food and Commercial Workers (UFCW), the largest grocery union in the United States. In late 2003 and early 2004, Albertsons, along with competitor Ralphs (owned by Kroger), locked out its workers who were members of the UFCW in Southern California, in sympathy with competitor Vons (owned by Safeway), whose UFCW workers were on strike. The issues in contract negotiations included health care benefits and wage structure. The UFCW lost its bid to keep its benefit and wage language in the contract intact, a reflection of how former Albertsons management viewed the developing Wal-Mart Supercenter situation in Southern California. At present, starting wages and benefits given to new Albertsons employees are lower than those of employees hired before the labor dispute. Employee approval continues to decline with the increasing distance in associate and corporate relations (as of 2006).

[edit] Litigation

On May 31, 2006, Albertsons agreed to pay a $2 million fine to settle a consumer-protection case brought by three California counties and the city of San Diego that accused the supermarket chain of overcharging consumers by improperly weighing salads and bulk food items. ^[3]

[edit] References

1. ^ SEC Filings: Supervalu
2. ^ Albertsons says it's "crazy"
3. ^ Albertsons to pay $2 million to settle consumer-protection case

[edit] External links

• Official site
• The New Supervalu, summarizing the impact of the Albertsons acquisition