When the big supermarket realignment in the Northwest – in which small-sized Haggen supermarkets swallowed dozens of Safeway and Albertsons stores – there was some cause for unease, the same unease many people feel any time a little fish consumes a big one. And Haggen may have felt, corporately, a little like you did the last time you ate too much for dinner. Now the results are emerging. Haggen has been hit with lawsuits from unions representing workers, over layoff and working hour issues, and from Albertsons over what that company says (Haggen disagrees) is non-payment for some materials. And now word that Haggen is closing a bunch of stores around Washington and Oregon, displacing hundreds of employees. One of those stores happened to be the first Haggens I ever visited, a well-designed and -run store at Tualatin, Oregon. Someone ought to compare the end results to the happy corporate talk around takeover time; the matchup won’t be close. – rsShare on Facebook
People tend to forget now, but Joe Albertson started out working at someone else’s supermarket.
Dropping out of the College of Idaho, he started as a clerk for the Safeway grocery chain. He was successful there, moving into midmanagement in his early 30s, but it wasn’t satisfying. Albertson thought he had a better way to run a grocery – they didn’t call them “supermarkets” then – and wanted to try running one on his own. Merging some of his own savings and some investments from a few other Safeway executives who believed in him, he launched his first Albertson’s at 17tth and State streets in Boise in 1939.
Befitting a store bearing its founder’s name, the Albertsons stores, which expanded quickly to Nampa and Caldwell, had a distinctive approach for the era, emphasizing not only a broad selection of food and other goods but also both self-service and strong customer service. The approach would eventually become standard in the industry, but it was new then, and Albertson’s personal insight and focus, and in many place community involvement, helped make his stores winners. Over the years he ran the company, the stores proliferated into the hundreds in many parts of the country.
Albertson’s company went public in 1959, but its founder kept a close watch until his death in 1986. In the years after that came the mass acquisitions: Seesel’s, Buttry, SuperOne, Bruno, and finally in 1999 swallowed the giant American Stores Company, which operated Jewel-Osco, Sav-on Drugs, Lucky and other stores. Closures and sales of stores followed. The public company, concerned as all public companies are about improving stock prices, began to be, apparently, more about buying and selling properties than it was about creating an innovative and popular supermarket – the basis of Joe Albertson’s successful business.
Financial indigestion was the near-term result, and in 2006 Albertsons was sold to SuperValu, and one of Idaho’s landmark businesses ceased to exist as an independent company. The Albertsons-labeled stores were slips up into various groups, bought and sold and swapped like trading cards.
Then it got a second chance.
Following a series of additional sales and mergers, which remarkably included important involvement by Safeway, Albertsons became a separate, freestanding company again. The Albertsons stores (and some others) were brought together with Safeway and some other store groups, and started operation as Albertsons LLC, still owned by an investor group. It has become again a massive company, running more than 2,200 stores around the country.
Last week, the investor group said it plans to take the company public – to again place Albertsons stock on the public stock exchanges.
What will Albertsons do now?
It could go back to the way it did business in the 90s, and some years down the road go through another round of swallowing and regurgitation.
The suggestion here, though, is that it doesn’t have to be that way.
Make that little memorial at 17th and State in Boise to Joe Albertson’s first store something of a touchstone. And remember that while much in the world may have changed since 1939, the basic business sense Albertson displayed back then is, or can be, something more durable.Share on Facebook