BOISE, Idaho -- With most observers expecting Albertsons to be broken up and sold to a variety of buyers, SN sought industry opinions on some of the major markets in which Albertsons operates and what the prospects are for each.
An amalgam of those opinions follows:
JEWEL-OSCO, Chicago, part of the old American Stores Co. and considered to be one of the two jewels in Albertsons' crown.
Strength: The leading market-share in Chicago, with an estimated 42.4%, vs. Safeway-owned Dominick's a distant second at 17%.
Weakness: None cited.
Possible buyers: Kroger Co., which vacated the Chicago market years ago but could be primed for a return; Supervalu, which has extensive distribution in the Chicago market; Tesco, which some believe could make a move into the U.S.
SHAW'S SUPERMARKETS, West Bridgewater, Mass., the other jewel in the crown, which Albertsons acquired in March 2004.
Strength: A strong No. 2, with a market share of 22.7%, about 1% behind Ahold's Stop & Shop; with the addition of Wild Harvest natural food sections to its traditional grocery offerings, stores have a little bit of Whole Foods in a conventional store.
Weakness: An inconsistent store profile, with a mixture of new units plus stores acquired over the years from Grand Union and Edwards that look less like Shaw's and more like their former operators. Competitors in New England outside Boston give Shaw's a run for its money.
Possible buyers: The other Albertsons holding that might attract Tesco; A&P, once a strong New England player; Kroger, to give it entree to the Northeast market; Safeway, to strengthen its existing East Coast business in Philadelphia and Washington D.C. markets; Delhaize, to strengthen its Hannaford operation, and Yucaipa Cos., majority owner of Pathmark Stores, which could begin to consolidate the Northeast with the addition of Shaw's.
ACME MARKETS, Philadelphia, another part of the old American Stores Co. and another strong operator.
Strength: A strong, profitable operation with a market share of 29% -- No. 1 in the market -- that competes with four struggling chains in that marketplace -- A&P's Super Fresh operation; Pathmark, which has chosen not to expand there; ShopRite, whose stores there have undergone some ownership changes, and Genuardi's, which has struggled since it was acquired by Safeway.
Weakness: Poor real estate decisions as chain moved into central and western New Jersey, resulting in low volumes as it goes head-to-head with Wakefern's ShopRite stores and Wegmans.
Possible buyers: Ahold, because Philadelphia would link the chain's Boston- and Washington-based franchises; A&P, to develop a contiguous market in the Baltimore-to-Connecticut corridor; Safeway, to build on its Genuardi's business; Yucaipa Cos., to strengthen its attempt to consolidate the Northeast through Pathmark.
DALLAS-FORT WORTH, "the most competitive retail market in America," according to CEO Larry Johnston, where Albertsons controls 17% of the market, the No. 1 market-share position.
Strength: Large stores, especially in Fort Worth, where it operates with a two-pronged approach: conventional Albertsons promoting "everyday fair pricing" and extreme-price-oriented Super Savers.
Weakness: A poor price and brand image against Wal-Mart and other price operators; company has spread store and district management thin to cut costs.
Possible buyers: Safeway, if it opts to bolster its Tom Thumb chain; H.E. Butt Grocery Co., if it chooses to build on a small Dallas base; newly recapitalized independents such as Minyard's.
FLORIDA, where Albertsons has been retreating from markets like Miami and Jacksonville and moving some stores to its extreme-price Super Saver format.
Strength: Large stores in fast-growing population centers, with potential to grow in light of financial troubles of Winn-Dixie.
Weakness: Inefficiencies resulting from scattered locations across the state; strong competition from Publix, Wal-Mart and Delhaize's Sweetbay chain.
Possible buyers: Select locations to established players in the market, or possibly to independent operators or conversions to other retail uses.
SOUTHERN CALIFORNIA, where Albertsons runs third behind Kroger-owned Ralphs and Safeway-owned Vons.
Strength: Fairly new store base after heavy capital investment, plus more stores than either major chain competitor.
Weakness: High price image and lingering effects on employee morale of 141-day labor dispute that ended in February 2004.
Possible buyers: Stater Bros., which could move more decisively beyond the Inland Empire (Riverside and San Bernardino counties) into Los Angeles County; retail members of Unified Western Grocers, a Los Angeles-based cooperative, or Hispanic-owned stores, including Grupo Gigante.
NORTHERN CALIFORNIA, where Albertsons is No. 2 to Safeway in a two-chain market.
Strength: Strong presence in outlying areas surrounding Bay Area.
Weakness: Serious underinvestment in asset base.
Possible buyers: Kroger, which has reduced its store count in the area but which might be enticed by the chance to get a strong No. 2 market-share position, with privately-held Raley's and Save Mart likely to show an interest in some locations as well.
SALT LAKE CITY, where Albertsons has prime locations.
Strength: Those locations, built when Albertsons was more interested in good, profitable stores rather than market share.
Weakness: Not found a niche to attract shoppers.
Possible buyers: Safeway, which has stores in states surrounding Utah and Idaho and would probably like to fill in the center; independents supplied by Associated Food Stores.