Since I wrote here the other day about my local Albertsons Market turning into a Haggen — and the Haggen chain pulling out of this area less than a year later — I've heard from a lot of you. Quite a few people told me reasons that were not evident to me.
They said Haggen jacked up prices. I'm not sure they did at the one I've visited, at least on the items I buy — but yeah, there's a good way to drive a business into the ground. If you change essentially nothing about your market except to make it more expensive to shop there, customers will feel gouged.
Years ago, I had a long talk at a party with an exec who was with the Ralphs Market chain, aka Kroger. We got to talking on a subject that is of some interest to me: How market chains are increasingly becoming identical in what they stock. There's a sign I used to see in markets that said something like, "If there's an item you want that we don't carry, please let us know and we'll special-order if for you."
I learned that those signs were outright lies. I tried on a few occasions to special-order things I wanted and the reaction was always like, "What? We don't do that!" One supermarket manager said essentially that to me standing right in front of the sign. When I pointed to it, he shrugged and said — I forget his precise words but they were like, "I don't care what the sign says. We don't do that." The decision of what they stock is made on a high corporate level and it's made for all their stores across a region, sometimes across the entire chain.
(And yes, I tried smaller markets. What I discovered was that smaller markets simply didn't have the network and supply lines to obtain most items they weren't already carrying.)
The Ralphs guy gave me a long, impossible-to-replicate-here explanation of how the decisions are made as to what they carry and what they don't, and even how they determine which sizes of some items to carry. There was absolutely no room in the process to service individual customers and their desires. He admitted to me that as food chains merge, diversity on the shelves will only suffer. He said, "When you had ten completely separate chains, you had ten separate buying departments deciding what to stock. When we get down to two or three chains, we'll only have two or three."
Getting back to Haggen: Some of my correspondents said that some of their newly-acquired stores fired longtime employees with a special emphasis on those who were in some way disabled. If that's so, there's a great way to create ill will in the community where you're trying to establish yourself. Here's a message I received from Chuck Huber…
Santa Barbara was one of the areas of overlap of Vons and Albertsons stores where Haggen acquired some now superfluous outlets. In some cases, Albertsons kept a smaller, older store and gave up a larger, shinier one; presumably they kept the more profitable location.
In any event, Haggen got some very bad press in this area when, shortly after taking over, they fired a number of employees who were mentally-challenged but had been working for the previous Vons or Albertsons quite satisfactorily for a number of years. That did not sit well with lots of potential customers, myself included. Combine that with higher prices for no perceptible improvement in quality, and no one was really surprised when they went belly up.
Indeed. Well, I wonder what will become of all those soon-to-be-empty markets. There was one Albertsons out in Marina Del Rey that didn't become a Haggen. Haggen didn't want it, I guess. It shares a shopping center with a Costco and now I hear that Costco is buying it and planning some sort of expansion. Since the Costco there is already as large as any Costco, I'm curious what they have in mind. I'm hoping it's more ladies in hairnets giving out free samples.
Oh, also: A number of you wrote in to tell me where I might be able to purchase those Hormel chicken and turkey entrees that I like. There is still an Albertsons that I'm sometimes near so as long as they remain an Albertsons and carry them, I'm covered.
The turkey ones (only) are stocked at Target stores. The Stater Brothers chain in Southern California and WalMart carries both but I'm almost never near any of their outlets. The nearest Walmart to me is like ten miles. The nearest Stater Brothers is more like twenty and by the time I could get to it, that whole chain will probably be acquired by Ralphs-Kroger or Albertsons-Safeway.
When I was a kid, one of the reasons we were taught that Communism was bad was that since there was no competition, there was no choice. The markets all sold the same kind of bread and the same kind of canned beans and the same kind of salad dressing…and if you didn't like it, too bad. You couldn't go to another store and find an alternative. For some reasons, people who think Communism is the greatest evil on the planet cheer on big companies getting bigger even though it leads us in the same direction.
That's the free market operating, they say, and it's always for the better, even when some guy can buy the only source of a drug and raise the price from $13.50 a pill to $750. (Okay, so he's been Internet-shamed into lowering his profit margin somewhat. But other pharmaceutical companies continue to do that kind of thing, slowly but surely and with more grace.) I have the feeling that one day, we'll wake up and Time-Warner will own half the businesses in America and Disney will own the other half…
…and then one will acquire the other or they'll merge — and the markets will all sell the same kind of bread and the same kind of canned beans and the same kind of salad dressing…all at whatever price they want.