Albertsons


Albertsons Companies, Inc. is an American grocery company founded and headquartered in Boise, Idaho.
With 2,252 stores and 270,000 employees as of fiscal year 2020, the company is the second-largest supermarket chain in North America after Kroger, which has 2,750 stores. Albertsons ranked 53rd in the 2018 Fortune 500 list of the largest United States corporations by total revenue. Prior to its January 2015 merger with Safeway Inc. for $9.2 billion, it had 1,075 supermarkets located in 29 U.S. states under 12 different banners. Its predecessor company, Albertsons, Inc., was reorganized as Albertsons LLC and sold to AB Acquisition LLC, a Cerberus Capital Management-led consortium. After buying back the majority of its former stores it sold to SuperValu in 2006, AB Acquisition announced it would change its name to Albertsons Companies Inc. in 2015. The company's corporate name was Albertson's Inc. until 2002, when the apostrophe was removed.

History

Beginnings

Albertsons was founded by Joe Albertson on July 21, 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 was built onto several times, but it was demolished in 1979 and a replacement store built on the same property. A brick monument stands on the northwest corner of 16th and State Streets in downtown Boise, commemorating the original store.
Joe Albertson's grocery store was an enormous success, and he reinvested 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.

Partnership with Skaggs/Expansion in the 1970's

In 1969, Albertsons partnered with Skaggs Drug Centers, owned by The Skaggs Companies, Inc., to create the first combination food/drug stores, first in Texas. 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 continued to expand its base in the West during this time, buying Fazio's-Shopping Bag in 1972 from Fisher Foods, adding 46 stores to the Los Angeles area. In 1974, Albertson's bought the 4-store Monte Mart chain in northern California.

Expansion in the 1980s

In 1982, Albertsons reorganized its management into four regions: California, Northwest, Intermountain, and South. The South stores included stores in Texas, Alabama, Louisiana, and Florida, as there were no stores between Louisiana and Florida. Albertsons continued to add stores in the 1980s, building or acquiring about 283 stores during the decade. Albertsons continued to expand in Texas beyond the Skaggs base in north Texas and San Antonio, entering the Dallas-Fort Worth market in 1984, and adding three Skaggs-Alpha Beta stores in Austin within months after entering that market in early 1989 with the acquisition of six Tom Thumb stores.
In March 1989, Albertsons opened its 500th store, in Temecula, California.

Expansion in the 1990s

Albertsons began to expand heavily in the 1990s. In 1992, Albertsons bought the stores American Stores had in Texas, Oklahoma, Arkansas, and Florida. Many of the stores had been opened as Skaggs Albertsons originally but by 1991 had been rebranded as Jewel-Osco. These included a few stores that American Stores opened in the late 1980s under that name in Florida. Additionally, a non-food distributions center in Ponca City, Oklahoma, was purchased from ASC.
In 1994, Albertsons would acquire 4 stores from San Diego County chain Big Bear Markets.
The Skaggs acquisition was a success, and the new stores were integrated into Albertsons' Southern 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 purchased Seessel's and 14 other stores from Bruno's, Buttrey Food & Drug, the Springfield, Missouri Smitty's chain, and three Super One Foods stores from Miner's Inc. in the Des Moines market, all while building new stores across all divisions. These acquisitions brought Albertsons into five new states: Georgia, Iowa, Missouri, North Dakota, and Tennessee.

American Stores

In 1999, Albertsons made its biggest acquisition yet: American Stores Company, which included the chains ACME in Pennsylvania, New Jersey, Maryland, and Delaware; Lucky in California and Nevada; Jewel, Jewel-Osco in Illinois, Indiana, and Iowa, and two drug store chains: Osco Drug and Sav-on Drugs. The acquisition briefly made Albertsons the largest American food and drug 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 146 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 January 2001, Albertsons restructured its "districts" to a divisional structure mostly based around distribution centers, with a drug store division and 18 regional division offices.

2001–2004 restructuring

On July 18, 2001, Larry Johnston, the new chairman and CEO of Albertson's, announced it would close 165 "underperforming" stores spread across 25 states, cut jobs, and reduce its newly created operating divisions. The first change was that the Utah, Idaho, and Big Sky division were merged back into Intermountain, while Oregon, Washington, and the Inland Empire division would be consolidated back into a single Northwestern division. Albertsons sold its freestanding Osco Drug stores in the northeastern states to Jean Coutu Group, a Canadian drug store company. In 2001, the short-lived Des Moines stores would close as well and Albertsons began to issue Albertsons Preferred Savings Cards for all of its stores.
The following year, three more divisions were closed entirely:
Additionally, the distribution center in Tulsa, Oklahoma, was sold to Fleming Companies, though no stores were closed. The Great Plains division stretched all the way into Omaha, Nebraska. The sale of the distribution center included a distribution deal for Fleming to continue to supply Oklahoma and Omaha.
After stabilizing the company's finances and consolidating divisions, in 2004, Albertsons acquired Shaw's Supermarkets and Star Market from Sainsbury's for $2.5 billion. Albertsons also purchased Bristol Farms for $135 million. During the same time, Albertsons exited the markets of Omaha, Nebraska, where it closed or sold 21 stores, and New Orleans, Louisiana where it closed seven, selling four to A&P, which converted them to Sav-A-Center.

Sale to Cerberus and SuperValu

Despite this, the acquisition spree had 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 assessments of the company and months of rumors, it was announced on January 23, 2006, Albertsons, Inc. was to be sold to a consortium of companies. SuperValu would take the bulk of the company including the brand names and what was considered to be the stronger divisions, including the Albertsons divisions of Southern California, Northwest, and Intermountain, as well as the ACME, Shaw's Supermarkets and Star Market, Bristol Farms, and Jewel-Osco brands.
CVS would acquire 702 stand-alone Osco and Sav-on Drug stores and converting them to CVS/pharmacy stores.
What was left of Albertsons Inc. became Albertsons, LLC, purchased by a Cerberus-led group of investors, and CVS Pharmacy. The acquisition was completed on June 2, 2006, with the Cerberus-led group. They held Albertsons LLC as "AB Acquisition LLC". Albertsons LLC included 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:
Following the sale, Albertson's, Inc., was removed from the NYSE. Albertsons LLC was technically the successor company to Albertsons according to SEC filings but it was New Albertsons Inc. that assumed most of the debt, got most of the property, and transitioned Albertsons stock into SuperValu stock.
The five Albertsons Inc. divisions that remained as Albertsons LLC were the Dallas/Fort Worth division, the Rocky Mountain division, the Southwest division, the Florida division, and the Northern California division. 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 Albertsons LLC was created, the company announced its intent to close 100 Albertsons stores by August 2006, including all but two Super Saver stores. 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.

A leaner company

In November 2006, it was announced that the Northern California division, consisting of stores located in northern California and northern Nevada, would be sold to Save Mart, with the deal closing in February 2007. The company gradually converted all the stores to its Save Mart banner over summer 2007, except for stores in the San Francisco Bay area, which were rebranded as Lucky. The deal included two Northern California distribution centers. Most of the Albertsons locations had originally been branded as Lucky before Albertson's 1999 purchase of American Stores.
Most of the changes in the next six years would downscale the remaining divisions. In the Dallas-Fort Worth division, in 2007, the distribution center was sold to Associated Wholesale Grocers, and Albertsons would exit both Oklahoma and Austin. The Oklahoma stores were sold to
Associated Wholesale Grocers associates while the Austin stores were sold to H-E-B. With the closures, only four stores south of the Dallas-Fort Worth area existed in Texas, all of which were closed or sold by December 2011. Additionally, many of the Dallas-Fort Worth stores closed during this time, even into 2011.
The Florida division, which was always discontiguous with Albertsons' main market, suffered a blow in June 2008 when Albertsons 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 April 2012, the company closed most of its stores in Florida. The Plant City distribution center was sold to Gordon Food Service though the Florida Division continued to be located there. By April 2012, only four stores remained in the entire state of Florida.
The Rocky Mountain division slowly shed stores. By April 2007, there were only 32 stores left in the state of Colorado. 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. 2008 also brought the sale of Albertsons' lone South Dakota and Nebraska stores to Nash Finch. In August 2009, the distribution center and division office closed and the 26 remaining stores moved to the Southwest division.
Only the Southwest division was spared the major cuts suffered by the other divisions. On June 12, 2007, Albertson's LLC agreed to acquire all Raley's 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 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. and in May 2008, Albertsons exited the fuel business and sold 72 Albertsons Express gas stations to Valero Energy, which converted most of them to Corner Store locations.

New Albertsons acquisition

While Albertsons LLC had restored its stores to profitability, SuperValu's New Albertsons Inc. had done poorly. While SuperValu did remodel many stores and open a few new stores, New Albertsons had shrunk. Of the 1100+ stores SuperValu acquired in 2006, less than 900 remained by 2013. Under SuperValu, Bristol Farms had been sold off, 36 Utah stores were sold to Associated Food Stores, the Wisconsin Jewel-Osco stores had been sold or closed, as well as the Shaw's stores in Connecticut. Additionally, like Albertsons LLC, most of the fuel stations had been shuttered or sold to other operators.
On January 10, 2013, it was announced that SuperValu was selling New Albertsons to Cerberus Capital Management. The deal was closed in March 2013. On February 23, 2013, AB Acquisition announced it would split operations of the newly combined company into eight divisions: Northwestern, Intermountain, Southern California, Southern, Jewel-Osco, ACME, Shaw's, and Southwestern, and in March 2013, the deal was officially closed. On paper, Albertsons LLC controlled the Albertsons-branded stores and New Albertsons Inc. controlled ACME, Shaw's/Star Market, and Jewel-Osco, but it was operated as one company.
On June 11, 2013, Albertsons announced its plans to merge its duplicate websites, social media accounts and mobile apps onto one of each kind, ending the use of the Albertsons Market branding and AlbertsonsMarket.com. 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.
That same month, Albertsons did away with the Preferred Savings Card in the former SuperValu stores that Albertsons LLC had dispensed with in 2007. The cards briefly continued in Southern California stores before being discontinued in July 2013.

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 January 2015.

Safeway acquisition

On February 19, 2014, Safeway began to explore selling itself, and by February 21, 2014, it was in advanced negotiations with Cerberus Capital Management. On March 6, 2014, Cerberus announced it 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, Washington, 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, plus Safeway's 49% share of Casa Ley, a Mexican grocery chain. Following the merger, Albertsons announced the new company would have 14 divisions led by three regional offices.
;East Region
;North Region
;South Region
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. All during this time, Albertsons continued to expand, purchasing 70 stores owned by the bankrupt Great Atlantic & Pacific Tea Company, which were quickly reopened as ACME stores after two-day store resets.

Post-Safeway acquisitions

At the time of the Albertsons-Safeway merger, the 18-store Pacific Northwest chain Haggen purchased 146 West Coast Vons, Pavilions, Albertsons, and Safeway locations that had to be sold due to anti-trust concerns, paying $300 million, plus spending $100 million to rebrand the stores. The FTC had hoped this would create a regional competitor for Albertsons. On September 1, 2015, Haggen announced that the company had filed a lawsuit against Albertsons LLC and Albertsons Holdings LLC seeking more than $1 billion in damages. The complaint, which was filed that day in United States District Court for the District of Delaware, alleged that following Haggen's December 2014 purchase of 146 Albertsons and Safeway stores, Albertsons engaged in "coordinated and systematic efforts to eliminate competition and Haggen as a viable competitor in over 130 local grocery markets in five states," and "made false representations to both Haggen and the FTC about Albertsons' commitment to a seamless transformation of the stores into viable competitors under the Haggen banner."
A week later Haggen filed for Chapter 11 bankruptcy and began the process of closing all but a few dozen 'core' stores in the Pacific Northwest. Albertsons would buy back 33 of the stores being sold at auction. In January 2016, Albertsons settled the lawsuit, agreeing to pay $5.75 million to Haggen, and subsequently reached an agreement to acquire the remaining 29 'core' Haggen stores located in Washington and Oregon for $106 million, the deal being approved on March 29, 2016. As part of the deal, 15 stores would still operate under the Haggen banner, with the rest converted to Albertsons locations.
During this time, the Albertsons family experienced further changes. On January 11, 2016, it was announced that the three remaining Albertsons stores in Florida, located in Largo, Altamonte Springs and Oakland Park, would be re-bannered as Safeway; this marked the first time that the Safeway brand would exist on a supermarket operation in Florida. It would also re-align the stores toward the Eastern Division. In 2016, smaller acquisitions included Homedale, Idaho-based Paul's Market and Santa Rosa, California-based G&G Supermarkets. Both brands were closed before they were converted into Albertsons and Safeway stores, respectively. Additionally, the United Supermarkets subsidiary acquired seven locations from Sweetwater, Texas-based Lawrence Brothers. These were converted into United Supermarkets or Albertsons Market stores. In late 2016, it was announced that Andronico's in the San Francisco area would be acquired as well. These stores would become "Safeway Community Markets" and still hold what made Andronico's unique, including chef-prepared items. When the first store reopened in February 2017 under the ownership of the Northern California division, it was still bannered as Andronico's due to an issue in obtaining local permits but the other stores were able to reopen as Safeway Community Markets.
On February 17, 2017, the Randalls store in south Katy, Texas, serving the Cinco Ranch area closed. On March 6, 2017, shortly after the Katy Randalls closure, it was announced that the Houston-area distribution center near Cypress, Texas, would be closed and the operations consolidated in the Roanoke, Texas Tom Thumb distribution center in the Dallas–Fort Worth metroplex to supply the Houston and Austin-area stores instead. Also, the Houston Division offices would be folded into the legacy Albertsons' South Division offices in Fort Worth. Additionally, the stores in the Albuquerque, New Mexico, market were realigned toward the United Supermarkets division.
On September 20, 2017, Albertsons acquired meal kit company Plated for $200 million.
On February 20, 2018, Albertsons announced plans to acquire Rite Aid, subject to shareholder and regulatory approval. In addition to retaining the stand-alone Rite Aid pharmacies, its Osco and Sav-on pharmacies located in Albertsons' existing stores were expected to be rebranded as Rite Aid pharmacies. On August 8, 2018, Rite Aid announced that the plan had failed to please shareholders and the proposed acquisition would be canceled.
That same year, Albertsons closed several stores across multiple divisions, including all three Safeway stores in Florida. These stores were sold to Publix for an undisclosed price. With the closing, Albertsons officially exited the state, which it had been since the late 1970s when acquiring their Skaggs Albertsons stores., as well as other stores across divisions. Additionally, the company divested its share in Casa Ley, selling it to Tenedora CL del Noroeste.
In 2019, Albertsons opened Albertsons Market Street in Meridian, Idaho, a flagship store located in a converted Shopko store and based on the Market Street brand of United Supermarkets. This became Albertsons largest store at 110,000 square feet and featured a variety of departments exclusive to the store or found rarely in the chain, including an oyster bar, a full bar area, and in-house sausages. Additionally, around the same time, a new Andronico's Community Markets opened in Monterey, California, the first new store to be branded as such.
In 2020, Albertsons announced the closing of a distribution center in Upper Marlboro, Maryland, laying off up 520 people. Albertsons said its duties will be shifted to an existing distribution center in Lancaster, Pennsylvania, which will add up to 300 workers. In July 2020, Albertson's total sales experienced a growth of 27% compared to the previous year. The rose in sales and higher traffic came as a result of the COVID-19 pandemic; it made $22.8 billion in the second quarter of 2020.
Albertson is currently involved in a battle over a group pension plan covering over 50,000 supermarket workers in the Washington, D.C. area.

2020 initial public offering

In January 2020, it was reported that Albertsons was preparing to go public again. The potential IPO for the company could be valued at around $19 billion.
Albertsons filed its S-1 with the Securities and Exchange Commission on March 6, 2020. It began its IPO roadshow on June 18, 2020, and began trading publicly on June 26, 2020.

Chains

Albertsons operates stores under the following banners:
Albertsons once owned several store 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 A+, Good Day, Janet Lee, Master's Choice, and Village Market. The drug store brands were consolidated under the name "Equaline", rather than the previous "Sav-On Osco by Albertsons" brand. Albertsons introduced an upscale private label brand, "Essensia", in 2003, which was later renamed by SuperValu as Culinary Circle.
Store brand items in Albertsons stores included Albertsons, Arctic Shores, Baby Basics, Culinary Circle, Equaline, Farm Fresh, Flavorite, Homelife, Java Delight, Shoppers Value, Stockman & Dakota, Stone Ridge, Super Chill, Whole Care Pet, and Wild Harvest. In 2011, SuperValu announced it would eliminate Flavorite and all brands named after the chains it operates 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, and Refreshe replaced Super Chill. By late 2015, the remaining store brands were replaced with "Signature". Albertsons started selling Lucerne dairy products, Mom To Mom baby products, and Priority Pet Food as well.
Albertsons Companies line of Own Brands products launches 1,100 brand new items a year, making it one of the most diverse in-house brands in the country. Albertsons Companies’ O Organics line is one of the nation's largest brand of USDA-certified organic products, with annual sales over $1 billion; it offers a wide array of products, giving every customer on every budget access to healthy, organic items.
Some of the brands in use are:
On average, stores in the Albertsons Companies range between and and almost universally feature a bakery, deli, meat counter, produce department, and seafood counter; many of the stores also feature in-store banks and pharmacies. Larger and newer stores may also offer enhanced amenities, including Starbucks coffee counters, prepared foods, in-store pizza, salad bars, and juice bars.