1. The amount of different surf spots we have- from point breaks to beach breaks, to reefs, and everything in between.
2. The amount of different retail stores we have. In just Encinitas alone we have eclectic independent stores like Surfy Surfy, La Especial Norte, and Besta Wan among others, to the 'brand name stores' like Home Depot, Target, and Chipotle among others.
Whatever you're looking for, it's a stones throw away. Grocery stores are no exception to the rule. Along with small independents like Seaside Market, Just Peachy, and our farmer's markets, we have our share of Whole Foods, Vons, Smart and Final, and others. Now add small Pacific Northwest grocery chain Haggen. The San Diego Union Tribune and San Diego Business journal reported recently that small market chain Haggen (how small? Just 18 stores to be exact) is exploding overnight with the recently acquired 146 stores in five states, including 25 in San Diego County, as part of a government-required divestment brought about by the pending merger of Safeway (which owns Vons also) and Albertsons, announced earlier this year.
After the close of the transaction in early 2015, Haggen
will convert all of the acquired Albertsons and Safeway/Vons stores to the Haggen
banner in phases during the first half of the year. The deal includes supermarkets in California, Oregon,
Washington, Nevada and Arizona, including these local stores:
- San Diego: Albertsons – 422 Washington St., 2235 University Ave., 730 Turquoise St., 5950 Balboa Ave., 10633 Tierra Santa Blvd., 10740 Westview Pkwy., 12475 Rancho Bernardo Road, 14340 Penasquitos Drive, 7895 Highland Village Place, 350 W. San Ysidro Blvd.
- Chula Vista: Vons – 505 Telegraph Canyon Road, 360 East H St., 870 Third Ave.
- La Mesa: Vons – 3681 Avocado Ave, 5630 Lake Murray Blvd.
- Carlsbad: Albertsons – 955 Carlsbad Village Drive, 7660 El Camino Real.
- Del Mar: Albertsons – 2707 Via De La Valle.
- El Cajon: Vons – 2800 Fletcher Pkwy., 13439 Camino Canada; Albertsons – 1608 Broadway St.
- Poway: Albertsons -- 14837 Pomerado Road.
- Santee: Albertsons – 9870 Magnolia Ave.
- San Marcos: Vons – 671 Rancho Santa Fe.
- Coronado: Albertsons – 150 B Ave.
If you'll notice, this includes the looooooooong vacant Vons at 7660 El Camino Real and La Costa Avenue (has it been a decade)? So what is Haggen all about? CEO Bill
Shaner describes it as "somewhere between a Vons and Whole Foods." The 146 store acquisition is an 811 percent expansion practically overnight. Grocery analyst and Supermarket Guru Phil Lempert in Santa
Monica says the purchase is part of a national shift away from larger chain
stores to more independently run grocers that can better meet the needs of
local communities. A growing number of smaller chains like Haggen offer the
wide selection of big chains, along with the fresh, local and gourmet selection
of stores like Whole Foods at lower prices.
"Because they are independent, they're much closer to
their consumers and are able to move much more quickly on different
trends," Lempert said. The growing demand for fresh and local foods are
two of the most important consumer trends for grocers, he said, and Haggen sources
a significant amount of its food from local farmers and producers.
"There are certain stores that can put up posters
showing Farmer Bob, but that doesn’t mean the apples under the poster are from
Farmer Bob," Lempert said. "We’re in a much more transparent and
yearning era where we want to know everything about where our food comes
from." Haggen's stores in the Northwest also carry bulk foods and a wide
selection of local beer.
"Variety is one of our strong points," Shaner
said. "We’re going to carry pretty much everything that consumers are used
to seeing in a full-line grocery store, plus we’re going to add some things
they’re not used to seeing there and usually and have to go to another store to
buy."
While some analysts say the purchase, with an estimated
value of $400 million, is a positive move for Haggen, others aren't so sure it
will work in the chain's favor. "I believe there's a dark side to this," said
grocery analyst David J. Livingston, founder of supermarket research firm DJL
Research in Milwaukee. Livingston pointed out that it's in Safeway-Albertsons' best
interests to divest their stores not to the highest bidder, but to the weakest. "If I'm Safeway-Albertsons, I do not want to sell these
stores to anybody who's very successful," he said. "Haggen has been
struggling over the last few years. So if you had to sell some stores off, who
would you rather sell them to: Kroger, which owns Ralphs, or a company that
might not do very well and ends up closing stores so you have less
competition?"
Shaner said that although Haggen did struggle for a few
years during the Great Recession, it is doing well now under the leadership of
private equity firm Comvest Partners. Every food retailer suffered through the recession, Lempert
said, because food prices went up and grocers, reluctant to pass the increases
on to their customers, absorbed "probably a little too much of that
cost." Haggen right now is healthy, Shaner said, and poised to
grow. And the divestitures from Safeway and Albertsons were "the
opportunity of a lifetime." This expansion means not only a bigger brand footprint, he
said, but also the promise of economies of scale and better buying power. That
means a lower cost of goods, which in theory the supermarket company will then
pass on to its consumers.
Shaner, a former executive for both Save-A-Lot and Supervalu
grocery companies, was hired to help Haggen navigate the expansion. Haggen has
a solid management team and infrastructure, he said. It also has a robust
technology backbone thanks to a relationship with Supervalu, and a supply
partnership with wholesale grocery cooperative Unified Grocers. "Frankly, those are the three reasons we will be able
to accomplish this," Shaner said. It also helps that Haggen's newly acquired stores will come
with managers and employees already intact; all Haggen will have to do is swap
out the inventory and change the look and feel.
Livingston, though, is skeptical that Haggen will be able to
scale up its operation without significant growing pains. "I think they’ve got a big uphill battle because
they’ve bitten off more than they can chew," he said. Lempert is more optimistic, and expects Haggen to convert
its new stores slowly and deliberately. He also expects to see some good talent
from the grocery business migrate to Haggen. "They're not a stupid company," he said.
"There's no way they would have been able to get the financing to pull
this off if people didn't think they could."
