Safeway For Sale

You may have heard by now that the second largest grocery chain in the country (after Kroger) is in talks with a potential buyer. The announcements have been coy about the identity of the potential buyer but speculation has centered on Cerberus Capital Management, a private equity firm that bought 600 Albertson’s stores in 2006, and pared the lot down to 200 over the next seven years.

Safeway, headquartered in Pleasanton, is the fifth-largest employer in the East Bay and currently owns 1400 stores.  It has already divested itself of 213 stores in Western Canada and is in the process of unloading 72 Dominick’s stores in Chicagoland, apparently getting itself in shape for a sale.  Safeway is being closed-mouthed about negotiations as would be expected. The United Food and Commercial Workers, which represent Safeway employees, are posting updates on their website, as available.  Cerberus was involved in a similar takeover of the Albertson’s chain  in 2006 which , according to the Union, “did not go well”. If any stores are closed, you would expect them to be stores in low-income areas or historically unprofitable stores. Considering the long distances between the  North Coast stores (Crescent City, McKinleyville, Arcata, Eureka and Fortuna, with Eureka already converted one store to a VA Clinic) one would think the remaining stores were safe, but who knows?

Traditional grocery stores have come under intense pressure from competitors such as WalMart, Dollar General and on the other end of the spectrum, Whole Foods. Kroger’s reported a 3% growth for the first three quarters of 2013 while Safeway showed less than 2%.  Whole Foods reported 5%, which if you’ve shopped in their stores explains their nickname,  “Whole Paycheck”.

Let’s hope that things go smoothly and well for our friends and neighbors who work for Safeway. Change happens but hopefully this will be positive change.  

 

 

 

8 thoughts on “Safeway For Sale

    • Thanks, Fred. I believe the author was the one who first broke the story in the Mercury. Good info. Looks like I’ll continue to be a Winco/Costco customer.Thanks God we have those options.

      • From the gist of that story, it sounds as if the smaller more local groceries, like Murphy’s or Wildberries, seem to be the growing trend. Hard to believe if only because of the price difference of a small store as opposed to a place like Winco.

        • I can believe it because people are avoiding DRIVING to shop. I used to hardly ever shop at Murphy’s (which is close to my house) because their prices were higher. Then I sat down and figured out, if the government figures it costs 55c a mile to drive, it’s costing me $5 to drive to Winco and back. So I don’t go unless I’m saving at least $5. I’m spending $100 a month or more at Murphy’s now. I only shop at Safeway if they have spectacular specials and even then reluctantly because I hate their deathtrap of a parking lot.

          • True. Then again, I see people from all over the county at Winco. As you pointed out, they probably only do it when they’re going to buy a lot of stuff- thus the people that fill two or more shopping carts.

            Used to be a regular at Murphy’s back when I was living in Cutten. I only go in there maybe once or twice a year now, but look forward to it as I enjoy the store and the pleasant (and attractive) staff. Got a killer deal on oatmeal once there a year or so ago.

            And don’t even get me started on Food Mart closing!

  1. I’m not sure I can think of one business buyout that’s ever been an improvement for the consumer, but maybe I’m forgetting one?

    Rite- Aid buying out Payless was a net loss, as far as I’m concerned, in regards quality of the store. Suddenlink buying Cox wasn’t an improvement, at least at first, from all the complaints I’ve heard. Don’t know about now.
    I don’t frequent CVS but the two times I’ve been to the one at the Eureka Mall I’d have preferred the old Long’s Drugs.
    Never mind that buyouts sometimes result in the closing of some stores.
    Can anyone come up with some examples of buyouts where things got better?

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