The point of anti-trust regulators forcing Albertson’s and Safeway to sell off 146 supermarkets in order to allow for the two companies to merge was to create a viable third competitor in the market.
That role was eagerly claimed by Haggen Inc., an independent grocery and pharmacy chain based in the state of Washington whose bold expansion was financed in large part with cash from a private equity fund that is its majority owner.
Haggen scooped up all of the stores, including more than 20 Albertson’s or Vons and Safeway locations in the Tri-Counties. It rolled out its big green logo with a lot of fanfare.
But lately, the green light is flashing yellow. The company has reduced hours for workers and had spot reductions. Consumers are complaining that prices aren’t as good as they are elsewhere.
And then Albertson’s sued Haggen over a multi-million dollar payment for inventory. Haggen says the suit is baseless and that it shouldn’t have to pay.
Between workforce problems, cranky consumers and the lawsuit, the Haggen rollout is not looking nearly as smooth as it was billed to be when the ambitious schedule was announced this spring.
And the problems with Haggen and Safeway-Albertson’s-Vons are a gift to Kroger, the nation’s biggest grocery company and the parent of the Ralph’s chain in Southern California.
The bottom line is that Haggen has stumbled coming out of the gate and it must regroup fast if it wants to retain customers and polish up its brand in the Tri-Counties.
If it can’t regain its footing, somebody else will want to operate in the most desirable locations.
But the goal of having a three-way contest for grocery store dominance will not have been reached.
Deal will be missed
Ann Deal was the real deal.
She built her brassiere and lingerie company, Fashion Forms, from scratch in Ventura, creating a line of clothing with mass appeal. Along the way she was a philanthropic soul, serving with our editor on the board of the California State University Channel Islands Foundation.
Operating a small company in the big world of fashion is hard. But Deal always had an upbeat attitude, a cheerful presence and a wonderful way of lighting up the room.
She’s moving her company to Austin, Texas, another great area for culture and educated workers. But she and her company will be missed.