Price war by Amazon-Whole Foods and Aldi scuttle Albertsons’ IPO hopes as customer traffic and same-store sales drop despite promos and price cuts.
Brick-and-mortar reality hit Cerberus Capital on the way to the exit: Supermarket chains Albertson’s (acquired in a leveraged buyout in 2005), Safeway (acquired in a leveraged buyout in 2015), plus some regional supermarket chains acquired along the way, are now loaded up with nearly $12 billion in long-term debt with no place to go.
Cerberus and the other PE firms in the deal once hoped to unload the construct — now called Albertsons Companies — in an IPO. These hopes move further into the distance as the stores are sinking into the ultra-tough US grocery store environment.
Albertsons Companies, with 2,323 stores in 35 states and the District of Columbia, along with over two dozen distribution centers, and some manufacturing facilities, revealed those difficulties in its quarterly filing with the SEC for its third quarter ended December 2, 2017.
- Revenues were flat year-over-year: $13.6 billion in Q3 and $45.9 billion for the first three quarters of the fiscal year.
- Cost of sales rose 1.8%.
- Gross profit margin fell to 26.7% from 28.1% a year ago.
- Gross profit fell 5% to $3.6 billion, which the company blamed in part on promotions and discounts “made to respond to the competitive environment.”
- Selling and administrative expenses rose 1.5%, which the company blamed primarily on wage pressures.
The endless losses
Flat revenues plus rising costs generated operating losses of $95 million in Q3 and $218 million for the year so far. Interest expenses and “other expenses” increased the losses to $305 million for Q3 and to $933 million for the first three quarters.
It also booked a one-time tax benefit of $523.5 million in Q3, “primarily driven by the reversal of a $359.0 million valuation allowance previously recorded against certain subsidiaries deferred tax assets as a result of a reorganization of our Subchapter C corporation subsidiaries.”
The tax benefit turned the quarter “profitable” (+$218 million) but left the year so far in the red (-$342 million).
The company already booked losses in fiscal 2014 (-$1.23 million), in 2015 (-$502 million), and in 2016 (-$374 million). Fiscal 2017 is shaping up to be another year in the red.
Albertsons is trying to raise sorely needed money by selling some of its stores and leasing them back. In September, it signed a sale-leaseback deal for 71 stores for $705 million. This brought the portion of the stores it still owns or ground leases to about 43% of its total stores.
Customer traffic down despite promos and price cut
Customer traffic fell again, this time by 2.7% in Q3 compared to a year ago, despite “significant investments in promotions and price.” These costly coupons and discounts, however, “did not achieve the desired impact of increasing customer traffic.”
Same-store sales fell again, this time by 1.8%, due to the drop in customer traffic, but offset somewhat by an increase of 0.9% in average ticket size, the fifth quarter in a row of declines. And this is compared to Q3 last year when same-store sales had already fallen 2.1% from the prior year. The trends look terrible:
Its debt takes a hit
Upon the news, Albertsons’ bonds dropped: Its 5.75% notes due 2025 fell three points to 87.5 cents on the dollar, and its 6.625% notes due 2024 dropped 2.75 points to 93.25 cents on the dollar. Its leveraged loans were also quoted lower, “sources said,” according to LCD S&P Global Market Intelligence.
Albertsons is struggling with a tough environment where the combination of Amazon-Whole Foods is shaking up an already shook-up market. Walmart, Kroger, Target, Costco and others are all crowding into arena.
German deep discounter Aldi announced last summer that it would further expand in the US with a $3.4 billion investment with the goal of having 2,500 stores by the end of 2022. In early 2017, it announced a $1.6 billion plan to renovate 1,300 existing stores. This followed a 2013 expansion plan of $3 billion to bring its footprint to 2,000 stores in the US by 2018.
Lidl’s plans get crushed by the same reality
But the other German deep-discounter Lidl – which has over 10,000 stores in 27 countries in Europe – demonstrates just how treacherous the business in the US is. In 2017, it had announced with great fanfare that it would also enter the US market. The plan was to open at least 100 stores within a year. By now 49 have been opened. But yesterday, the Handelsblatt reported rumors that Lidl has halted its US expansion plans.
When the German business daily reached out to Lidl, a company spokesperson refused to confirm or deny the rumors, saying that the expansion has been “overall successful” but “there is need to adjust one or the other point.” And added: “Constantly examining and working on a property portfolio is absolutely normal in the sector and not Lidl-specific.”
Lidl now no longer has projections for future store openings in the US, according to the Handelsblatt, which said local reports by real estate insiders and politicians in New Jersey, Pennsylvania, Ohio, and Virginia indicated that Lidl has stopped working on stores or has even abandoned locations into which it has already sunk some money.
Even Walmart. Read… Walmart Suddenly Shutters Numerous Sam’s Clubs without Notice, 11,000 Jobs Impacted, Chaos Breaks out on Twitter
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We have lidl store and it is great. They are paying better than other local retail, and prices are good. Other stores have had to respond to their pricing.
I hope lidl stays here….
Wolf, As usual, very insightful analysis on the Supermarket industry.
Interesting, how a few short years ago, Supermarket anchored tenants properties were the hottest CRE investments, does not seem so any longer.
Wolf, we never hear from you where to invest or where to allocate and put our money to work,
What is your thinking on that? Bonds, CRE, Equities, Emerging markets, Index Funds? can we get some insight on your thoughts ?
People make a ton of money selling financial advice. That’s their job, and people pay them to do that.
My site is free. It’s focused on analysis and news – and stays away from recommendations or advice.
Acme’s problem here in my eastern Pa location isn’t as much price as it is in surly customer service amd insufficient cashier help most of the time. Too many other local grocery stores (Wegman’s, ShopRite) treat their customers better
I have found Giant to be good on the customer service front.
And I agree with you on Acme. Well worth avoiding.
I believe Albertson’s is the current owner of ACME, so they may not survive this. Can’t say I don’t find it amusing that Cerberus Capital got caught holding the bag on this one. I’m so tired of the strip mining and destruction PE companies have been engaging in for the last 25-30 years or so.
ACME in my corner of SE PA is quite good (except for the cashier problem,) but it probably has more to do with the fact that the store has been there forever. Local Giant not so much. No Shop Rite or Stop & Shop anywhere near me. Local Wegman’s ARGGHH! Just getting in and out of the complex/parking lot is a too much of a PITA for me. But local chains McCaffrey’s and Weis crush them all for customer service.
Safeway came to PA in 2000 and destroyed a really great local chain called Genuardi’s. By 2005 the stores were unrecognizable as the Genuardi’s of old, and almost everything was a Safeway brand. By 2010 all the Genuardi’s in SE PA were closed and sold off to other markets.
Pathmark partially destroyed itself, the A&P Co came in and destroyed the rest.
All our local Albertsons in Boise are like morgues (and this is the birthplace of Albertsons). People here now prefer Fred Meyer (Kroger) and WinCo.
Well, that’s because Idaho is a shithole. Please share this with everyone moving here!
If it’s so bad, why don’t you move? If it’s so bad, why are all these people moving there? Believe me, I was surprised to find that it’s a booming state.
Cathy probably actually loves Idaho but wants to discourage too many newcomers from ruining it so that she doesn’t have to move.
If hell is other people, it’s not specifically Californians who’re guilty of ruining Arizona, Colorado, Texas and Seattle.
Kroger’s is my favorite Great service and nice people in Raleigh anyway
Agreed that Fred and WinCo are popular. Fred discounts fruit/veggies which draws me. WinCo is generally the best priced IMO. Albertsons shoppers have to be absolutely blind on prices when they fill those baskets. I go for the discounted bakery/meat; both of which aren’t discounted as much as in the past…I agree with Cathy’s sentiment on people moving here. If things work out I plan on exiting this year!
If Cerberus can’t unload its holdings in an IPO, who ends up holding all that debt? Is it Cerberus, or will creditors be forced to fight over the scraps while the PE firms walk away with their billions?
I believe it would be the creditors and not Cerberus. They’ve extracted their capital and now it’s the bank problem. Crazy system
Our local Albertsons is driving away customers with its high prices. We’re in an area that is well-served by grocery stores, and those Albigensian heretics think that nobody will drive to a competitor. They’re wrong, and won’t be able to increase prices on the sly enough to make up for the decline in volume. People tend to know their prices, and at some point each person may make that convenience calculation to pick between the closer-higher one and the farther-lower one.
Second that one. We have an Albertson’s 0.3 miles away, and the only reason we would go is if needing a single item, like a gallon of milk. Otherwise, the cost is too high.
Local supermarkets are considered a good investment strategy during a recession. Albertsons is a high end super, and I would say that demographic is growing faster than you might imagine. At the other end of the class ladder (I shop around) you have any number of cheap discount food warehouses. So I like their niche. When the recession weeds out a few low end players and the supers get some pricing power they will do okay.
Albertson’s is … high end ? In what alternative reality ?
Suffice it to say here in Colorado they’re not . Never have been for that matter . If anything Albertson’s has been at the bottom end of the bottom feeders barely hanging on with out dated marketing , stock that does not represent the current tastes ( and fads ) with each and every store both on the front range , mountains and western slopes having become supermarket graveyards since the 70’s with no hope in sight and everyone for decades constantly wondering what was keeping their doors open … not to mention how in the hell did they end up buying Safeway … dragging Safeway down in the process
Which is to say A.B. .. Albertson’s has no niche to speak of … and if anyone’s in dire need of being ‘ weeded out ‘ .. it is most definitely Albertson’s .. so mark my words … this time … it’ll happen … as it should have decades ago .
Agree with TJ 100% on all fronts. Only customer I’ve seen in Albertsons (Phoenix, AZ) are folks from surrounding low-income housing, or perhaps folks who don’t drive and have to go to whatever is close. I used to go to the pharmacy located in the store, but that’s fallen to the wayside as well. And, I too register a big question mark about Safeway. That’s sad. They’ve generally been a pleasure to shop at. Customer service at it’s best. Good product lines. Fair pricing. ??? Who knows. We do the bulk of our shopping at Frys (Kroger store), Sprouts. Their selection, sales and, prices are hard to beat
Albertsons is a high-low loss lead (pricing) supermarket that is average at best. Wegmans is an EDLP supermarket that is high end quality service/selection.
High/low operators sell front page ad items below cost, say grapes at 79cents per pound. They proceed to jack up lots of other items prices to offset the loss they will take on the grapes. This is done on a weekly basis with the price manipulation.
EDLP (Every Day Low Price) supermarkets avoid the loss leaders (below cost sales) in order to offer lower overall prices and slimmer profit margins. But the profit margins, while smaller, are more stable and they don’t need to jack up prices on a weekly basis.
Prior career before becoming an RN was 2 decades of grocery store management.
Years ago we shopped at a Wegmans in the Allentown, PA area and drove 45 minutes to get to it. I think it is the best supermarket I ever shopped in. It wasn’t cheap, it had high end products and was a great shopping destination. I consider it the best supermarket in America.
Albertson’s is within walking distance to us and has the best bakery products than anyone else but when we shop for more than muffins we go to WinCo (employee owned) where every item is from 90 cents to 3 bucks cheaper than anybody else with the exception of Walmart where prices are comparable but I refuse to shop there..
Retail everywhere seems to be loaded up with debt. Corporations of all stripes are loaded up with debt doing stock buybacks to enrich the few. If Professor Steve Keens is right and it’s overloaded private debt that brings down economies, that most mainstream economists never seen coming because of their dismissal of private debt, then we are in for something that will make 2008 seem like a prologue to the real disaster. ..
Winco is good. I used to live near one and enjoyed going there. Nothing fancy, affordable, fast check out, and a snack bar with popcorn and pizza on the way out of the store.
I really like Lidl, although part of it might be because of the fancier type of stores they were building in the US initially, which it sounds like they might be changing the format of going forward. They are like an upgraded version of Aldi, with a fresh bakery. I hope they stick around. What I fear for them is that with such a small number of stores it may be difficult for them to continue to have leverage over their US suppliers.
Here is an English version of the article linked in Wolf’s story:
https://global.handelsblatt.com/companies/german-chain-pushing-us-grocery-prices-876442
I think Lidl’s biggest challenge is to convince US customers that their private label offerings are indeed as good or better than the brand offerings. And of course it’s not just about convincing, but also making sure their products actually are.
As for Amazon and Whole Foods… I wouldn’t worry too much about them affecting much. Even after Amazon’s acquisition, they are still playing in a price strata that’s well above the mainstream US grocery market.
Max … suffice it to say here in Denver the Whole Foods / Amazon juggernaut ( or as I call them … the BORG ) is kicking the crap out of our King Soopers ( Kroger ) putting the final nails in the coffin of Albertson’s / Safeway and is rapidly eroding the market shares of Walmart , Trader Joes and Sprouts .
The effect among all is obvious as their stock diminishes with less choices and definitely less healthy choice on offer .. with all of the competition’s current ‘ tactics ‘ forcing their customers to shop elsewhere .
So would I worry ? With the effects directly impacting myself and my households shopping choices … Damn right I would … and do !
I really like Lidl, although part of it might be because of the fancier type of stores they were building in the US initially,
This is funny because the Lidl strategy in Europe is to have pretty stark interior design with goods stacked somewhat messily on europallets to rub in how cheap it all is.
Aldi is the same – except they even have one or two pallets with the goods spilling out on the floor to display the cheapness ; the funny thing with Aldi is that they also have good (and fairly expensive) wine on sale.
EU business going into US is always a risky proposition mainly because of the ominous US bureaucracy, which everyone in Europe seem to believe is very much less and “more business friendly” than is actually the case.
I especially enjoy when some Danish libertarian is publicly “slamming the door” and going off to the Land-Of-Opportunity in a hissy-fit over some trivial slight over safety or whatnot and then get thoroughly screwed and sued all the way back across the water again – you’d think that adult people didn’t believe enough in what happens in the movies to bet money on it, but they do :).
PS –
The difference is that Europe in general use “stated-purpose legislation”, something must be fulfilled, but, with a lot of freedom on how to fulfil the stated purpose of the law.
US law, OTOH, is prescriptive, the law is ordering what must be done, no interpretation allowed.
For example the 12-page EU Electrical Safety Directive can be summarised as: “Electrical installations shall not kill anyone, cause damage property, livestock and people nor cause disturbances to themselves and other equipment”.
By following the EU harmonised standards, one meets the requirements, whereas in the US legislation is prescriptive: All types and size of wires, size of conduits and every little nut & bolt detailed and strictly described in the legislation – and there is even an Inspector to go with it – for *every* collection of legislation (except Finance where nobody goes to jail ever, despite many rules and inspectors, well since Bernie Maddock anyway)!
PPS –
It is also funny to watch “the disturbance in da Force” over Donal Trump lowering the corporate tax rate. Most of the world outside the US has taxed corporations lower than the USA for decades, especially all those “socialist” nordic countries –
https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/corporate-tax-rates-table.html
Nice share.
Value added.
Thumbs up!
Central North Carolina – with one of their big distribution centers in Alamance County, we are, I guess, ground zero for Lidl.
They grabbed a certain amount of business I guess, but then peaked out real quick.
They have, I think, the same problem as Aldi’s, a very different grocery concept that doesn’t fit in with how people are used to doing their shopping. Aldi’s I think overcame some of that by expanding very slowly and keeping their costs extremely low. Very little, if any, advertising, inexpensive stores, low employee numbers, etc. They’re earliest stores around here were in lower rent parts of town with a large Latino population.
But its not like they’ve conquered the market. They are popular niche player. They have their low end base, and oddly enough, they also have a higher Trader-Joes like following.
To my mind, Liddle is going to have to play a very long game to succeed, and it doesn’t sound like that is what they wanted.
“… they also have a higher Trader-Joes like following. ” Yes, that’s because they are actually affiliated.
When Aldi’s started, or that I learned of it in the late 90s, I wasn’t so keen to shop there. Now, it’s my first choice. The LAST place I want to go is to a Albertsons/Ralph’s/Pick-N-Save/Krogers type store.
For any supermarket reading this …
Do you know how nearly impossible it is to find Canadian bacon deli sliced? Close to 100%, that’s how impossible it is. My only source, for $6/lb, is closing shortly. I bought a 1 year supply for the freezer, more or less, when I heard this.
FYI: Canadian bacon is really pork tenderloin, smoked in some way. I suspect some is just lean pork, but I really don’t care. At high end grocers, Canadian bacon is about $14/lb. They probably sell the good stuff. One of those is local. I puke at the thought of paying $14.
I don’t want to pay $14. The $6 stuff is great.
Do you want to attract traffic? If so, then carry Canadian Bacon @ about $6/lb in the Deli. Put out a sign about Breakfast Sandwiches and Canadian Bacon and how YOU have it RIGHT HERE. People will come in and, I suspect, will buy lots of other things, too.
Why not just buy that tenderloin, take it to the meat counter for slicing, and use liquid smoke?
https://www.amazon.com/Colgin-Liquid-Smoke-16-0-Ounce/dp/B000YOMRA8
Why not jazz up some bologna?
Learn to cook.
Aldi’s sells, what I swear is the same Egg McMuffin that McD’s sells, frozen, 4 to a box, for $3.99 U.S.
Compare the quality of the cheese and the quality of the meat and the thickness of the meat. Plus the cooking at home for family. Microwave vs frying in butter? No comparison.
Why not just eat a bowl of cereal?
Went into An ALDI market here on the nature coast of Florida for the first time. Seems they have embraced a mini costco warehouse model with no membership fees, no bakery,no butcher shop. They charge for bags and you have to sack your own purchases. The prices were very favorable on mostly non name brand items that seemed of high quality. The store had brisk traffic although it might be seasonal due to the many winter homes in the area. I think the company may be purchasing some one time vendor “overuns” at a discount to be passed on to you.
I’ll be back to shop
Here in Germany Aldi and Lidl are really good. The in store baked goods are good at both but Aldi is the best. Their store brands are good. The beer is cheap with limited choice…but good. Plenty of good wine that is cheap. The secret seems to be to limit choice, basically sell store brands, not have a lot of employees and the ones they have do everything in the store, small locations just out of city limits, and high volume. You get in and out fast. Everything is easy to find. In the center they have tools and clothes and computers and everything for the impulse shopper. It is said that Aldi is impulse shopping on steroids. Go in for milk and come out with a dishwasher (there was one yesterday) and an impact hammer. You could fit an Aldi and a Lidl into the Von’s I am used to in California and have space left over. I think Kaufland (kind of like Wal Mart) owns Lidl.
The best thing about Aldi & Lidl are not how they save you money (they do) but rather how they save you time. Instead of walking forever in a huge Kaufland or Kroger, it’s in and out much faster.
Who really needs to scratch his head trying to decide which cottage cheese or plastic wrap to buy. Let the supermarket buyers pick the best one and pass the savings in money and time to the consumer.
Viewing the supermarket buyers as “editors” to filter out much of the superfluous choices really can add value.
Of course some retailers will always distinguish themselves based on variety & selection, but the hard discounters with their small spaces and limited selection of skus fill an important niche.
It makes sense for Lidl to pause and refine their model before they expand further, and expand I hope they do. In my current region there are regrettably none of these small convenient discount groceries like Lidl or Aldi that I so grew to appreciate when I lived in Germany.
Cerberus Capital will get nothing more painful than a small pimple on their backside from this. Too bad it can’t take them down.
As far as German grocers are concerned – is it reasonable to suspect that their growing excursions into the US are being supported in some way by negative interest rates in the EU?
Overall, Aldi does a good job. Their latest openings of larger stores seems to be exceptionally well done.
I have lived in Clearwater Florida for twenty years. The dominant food chain here is Publix. I’ve been told that they have 58% of the total grocery market in Florida and it could well be true. As a matter of observation, their stores always seem to be busy. Their quality is good and they aren’t much more expensive than their competitors if you work the specials. I wish Aldi and Walmart good luck, they’re gonna need it.
The Publix 2 for 1 weekly sales were the best buys. I went every week to stock up on items I didn’t even need, but knew I would eventually use. Great for veggies, sauces, and condiments.
The Albertsons locations here in the DFW area look tired, run down. That combined with relatively high prices is a perfect reason to avoid them. The newer WinCo Foods locations we have are far and away better deals for everyday grocery needs. We didn’t have WinCo in Houston (HEB territory), but they appear to be doing well here in Dallas Fort Worth.
I’ve wondered for years how Safeway survives given their higher prices, poorer selection and bad customer service (because of too few checkers it takes longer to check out than to shop). The only reason I ever go there is because they do carry a few unique items, but 90% of my grocery money is spent elsewhere. It just seems like they have no real interest in actually competing or changing what they’re doing wrong.
Mike-how many years? Here in NorCal have only noticed a Safeway decline since their acquisition by Albertsons’ (Cerberus). Prior to this, Albertsons’ made an abortive attempt at entering the market here for a couple of years, but closed their stores (most of which re-opened under the old ‘Lucky’ moniker-don’t know the actual owner of those, now). From available checkers to stocking non-standard items and range superior-quality store brands, Albertsons has definitely followed the ‘if you can’t beat them, buy them out and hollow-’em out’ strategy. Consumers lose again. May we all have a better day.
Amen to that. For years my wife would nag me about high prices at Safeway but I paid her no heed because they were in a convenient location. That is until I went in for some pot roast ingredients and came out with a stunning bill. Around the same time I was beginning to wonder about their policy to understaff their checkout lanes with sloths wearing human costumes.
Add to that they force customers to produce for them valuable personal data via ID cards (membership) or suffer even higher prices.
I just fill out the card application with BS information, a made-up name and address. They don’t check it.
Ditto – and more than just grocery stores.
“They don’t check it.”
Well, if you are paying via a credit/debit card, then they can still identify you.
A lot of the money stores like Safeway, Ralph’s, PicknSave/Kroger, and other out dated middle/middle-upper tier grocers make their money is by leasing shelf space. That is the money they receive from the distributors for placing products at a certain eye level or next to certain products, etc.
If and when, that money dries up, the stores will collapse from over head costs.
If the stores actually had the power to organize the stores the way they saw fit at a local level, the producers wouldn’t pay up.
When this type of stores fail, it will also impact the producers.
To sum it up if you see the words “leveraged buyout” run away screaming.
Good advice for any corporation of which you are a customer. Odds are pretty good that product quality and/or service are about to go to hell.
In Massachusetts, I shop at Market Basket, rather than the Albertons-owned Shaw’s although Shaw’s is much closer, because prices are ~20% and I get better service. And Wegman’s is expanding into the area as well.
Ditto, I have a “Shop and Save” about a mile away, which is usually a ghost town, but would much rather drive a few more miles to Market Basket for their better selection and lower prices.
Living on the New York State – Ontario, Canada border, I shop ALDI’s regularly in NYS, with the odd stop at WEGMANS….with the exception of milk, cheese, eggs, chicken and a few items like Hummus, it amazes me that any other product – cereal, bread, fresh fruit, etc is less expensive here in Ontario even without the exchange difference of 20% !!!
How can this be with a smaller population, higher taxes? I often wonder how does a family of 4 feed themselves in the USA?
I work for a mfg. company that is now Private Equity owned. The cash has been pulled out and we are now leveraged 100%. Their focus is only cash flow and liquidity, while the employee’s and customers are completely ignored by management – the good people are leaving quickly as the business slowly implodes around us. I guess once the cash is gone nothing else really matters.
Aldi twice a week, great vegetables, not so good meat. Publix once a week to take advantage of the weekly BOGO’s (buy one get one). Harris Teeter maybe once a month if I can’t get it at Aldi or Publix.
I’ve noticed a trend with the private equity purchases. They go after businesses that analysis shows will be changing drastically in the not too distant future, but appear healthy at the moment. They go in, suck all the monetary value out of they can get, then let market actions do what the market was going to do anyway. They just get to the party before the average person realizes impending changes.
Look at ToyRUs and the radio station iheartradio- The market fundamentals changed drastically and the Priv.Equity investors got there before society realized how the market was going to change. The Investors sucked out all the economic value, the market did what it was going to do anyway, and there it sits.
Any type traditional manufacturing plant is a good candidate with the impending changes hitting that sector. There’s a good chance the entire factory will be shuttered in the near future. IT would be interesting to note what they make.
‘The tax benefit turned the quarter “profitable” (+$218 billion) but left the year so far in the red (-$342 billion).’
Only the US government can screw things up so badly that they lose $342 billion in one year :)
I think that you meant to use the word “million” (M) instead of “billion” (B) twice in this sentence.
Um, yes :-]
Albertson’s didn’t try very hard in my state. They changed to Fresh Market, a very bland name.
Fresh market is another bought in a leveraged buy out. Customer service went down the tubes shortly after as half the work force disappeared.
I noticed a decline in Fresh Market over a year ago and when I checked, they had indeed been acquired by a hedge fund. Too bad, they eliminated all the baked goods I went there to buy, so I rarely stop in now.
Has a leveraged buy-out ever worked ‘long term’ to the benefit of the company and its employees?
It seems to be the kiss of death and the sole purpose is to strip mine company assetts for the benefit of the PE firm.
Why are these procedures even legal and what fool would buy the shares in a PE firm’s IPO given the history?
I can’t recall even one leveraged buyout working out for the company or employees, and my memory goes all the way back to KKR buying Nabisco.
When the mob did this to a business it was considered a felony. Now they have probably morphed into a hedge fund.
Went grocery shopping on Monday (I hit up several places to get what I need since they are all a couple minutes drive or walk). Fred Meyer’s was busy. Trader Joe’s was so packed I had a hard time getting around, but checkout was still done in a couple minutes. Target was busy.
Then I went to Safeway and it was a ghost town. Their prices aren’t really that bad – they have boneless skinless thighs and breasts for $2.50 a lb at the meat counter every week – but it’s a nightmare checking out. They never have more than 2 lanes open besides the self checkout. Their self checkout is the worst of all I have tried – super ornery and constantly trying to call me a thief for putting things down in the wrong spot. If it weren’t for the chicken, I would never shop there. They also have grass fed beef that no one ever buys, so I pick it up at 50% off at expiry although I troll so much that I notice a lot of it never gets discounted and just gets tossed because no one ever checks it.
Love Lidl here in Ireland. They are a cut above Aldi and the rest of supermarkets.
Aldi and Lidl are unknown where I am.
Safeways, all of them, are ghetto AF. But there else are you going to get diet tonic water, cheap booze, some seriously legit garlic, and other odds and ends no one else has?
Target’s good for things like mayonnaise, it’s 1/3 less than it is at Safeway.
Dai Thanh for veggies, hands down. They also have a lot of other neat stuff, dishes and seaweed snacks and so on.
99 Ranch is good for meat and their veggies can be decent.
I’m waiting for Hmart to open up the street from me (Korean) but I walked around in the Hmart in Koreatown in Santa Clara and it didn’t impress me – expensive.
Nijiya in Japantown has good eggs that can be peeled relatively easily if boiled, and don’t break getting them home so I’m not losing 30% of them. Also really solid prices on high-grade stir-fry beef and super good prices on mackerel. And they have some interesting seasonings. I stop by there a lot.
Whole Foods has a lot of expensive stuff but a lot of things are cheaper than Safeway or anywhere else. Nuts, sardines in olive oil, olive oil itself, and if you’re hungry their little buffet is nice. If you have a lighter appetite, their olive bar is nice. And you’ve got an eating area and can wash your meal down with a $1.99 tall PBR or a 79c lemon or lime fizzy water.
So you’ve got to shop all over the place to obtain things/get decent prices where I am.
Oversimplification at best. I can think of very few places where all these chains compete in the same general space. Even when I lived in Chicago I would have had to driver all over and spent a lot of time on the commute to visit all these stores. Who drives an hour to a grocery store if another one is ten minutes away?
Whole Foods has a minuscule number of stores compared to Albertsons’s and the rest, hardly any real competition nationwide. Since Amazon bought them they have had issues with declining quality in the produce area with lots of customer complaints.
Even Aldi is a poor competitor to the big chains for the simple reason that they really don’t carry much variety. Aldi is fine for really poor people who have only price as their concern but for everyone else they offer little. They don’t really compete head to head with a full service grocery chain and I can’t imagine they appeal to the same people.
I think there are other reasons for the major chains not doing well, such as the proliferation of newer chains, each of which is very small but taken as a group can compete with the big boys in the number of stores, such as Fresh Thyme and Fresh Market, more farmer’s markets, and the multitude of food delivery services such as Blue Apron.