![]() The British firm Tesco suffered a similar fate with Fresh & Easy, the chain of convenience store-size food shops it brought to Southern California in 2007. It eventually settled its lawsuit for $5.75 million. Haggen did minimal advertising and almost instantly acquired a reputation for high prices that it couldn't shake. may be the dean of Southern California grocery executives. "It's impossible." "How can a company that size take on 150 stores?" asks Jack Brown, who as the 77-year-old CEO of Stater Bros. The firm filed a $1-billion federal lawsuit accusing Albertsons of "sabotaging" the transition, but industry observers tended to blame the debacle on the hubris of Haggens' controlling shareholder, the private equity firm Comvest Partners. ![]() That was the case with Haggen, a 16-store Bellingham, Wash., chain that expanded vastly beyond its Pacific Northwest home turf by picking up 146 stores - including 83 in California - divested by Albertsons and Safeway as a condition of their merger. Within six months, Haggen had declared bankruptcy and closed the acquired stores. RELATED: In Alhambra, demographic shift reaches the grocery storeīut some of the most spectacular damage has been self-inflicted. In part that's because the grocery business is generally one of razor-thin margins of 1% or 2%, leaving little cushion against missteps. Peltz and Shan Li reported last year, the siren call of the greater Los Angeles market, with its population of more than 20 million, often has lured ambitious retailers onto the rocks. That's important because of the factors that drive up the region's cost of living, including the cost of food - taxes, real estate and fuel prices among other things.Īs my colleagues James F. "You've got the best of regional, national and international retailers, serving a United Nations of consumer constituencies."įlickinger predicts that Aldi's expansion will spark a price war that could shave 30% from the annual food bills of budget-conscious families. Flickinger III, the descendant of a family that owned what was once among the largest food wholesaler and retailer in the East. "The depth and range of competition is unique," says food industry analyst Burt P. Virtually every sector of the food retailing business is represented in the region - from high-end full-service stores such as Gelson's, Whole Foods and Lazy Acres to the epicurean chain Trader Joe's (a corporate cousin of Aldi's) to warehouse stores such as Costco, Sam's Club and Wal-Mart the quasi-warehouse retailer Smart & Final and expanding ethnic chains such as Northgate, Ranch 99 and Super King. Supermarket consultant Burt Flickinger IIIīut that still left the landscape littered with rivals and failed to scare off the newest regional contender, Aldi, a German chain that offers low-price house brands out of drugstore-size 10,000-square-foot stores. You've got the best of regional, national and international retailers, serving a United Nations of consumer constituencies. The depth and range of competition is unique (in Southern California). While industries all over the country are merging and consolidating, the region's grocery market remains a model of how vigorous competition can serve the consumer. A 2014 merger brought the full-service supermarket chains Vons, Safeway and Albertsons under one corporate roof. ![]() Is there anywhere in the country with as many food retailing choices as Southern California? This turns out to be the right play, because my wife, just back from picking up gardening supplies on deep discount from the nearest Aldi, 10 miles away, reports that a dozen can be had there for $1.99. ![]() The home stretch: Sprouts for cantaloupes, grapes and a few scoops of whole cashews, then Costco for a pallet of paper towels. Finally, to Ralphs for butter, milk and Bumble Bee solid white albacore (a staple at our house), skipping the eggs at $3.49 a dozen. ![]() (I skip the store's sit-down wine bar because it's a bit too early for Cabernet.) Then it's across the way to Lazy Acres, for a half-dozen Honeycrisp apples and a small wedge of Humboldt Fog goat cheese, and up the road to Gelson's for a couple of pounds of Canadian-roasted Kicking Horse whole bean coffee. It's grocery day, so I load a bunch of canvas shopping bags into the trunk and set out.įirst stop, Trader Joe's, for a couple of jars of Better'n Peanut Butter and to replenish our supply of its frozen palak paneer ("authentic Indian recipe"). ![]()
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