Albertsons

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Albertsons (officially New Albertson's, Inc.), a wholly owned subsidiary of Eden Prairie, Minnesota-based Supervalu, is a supermarket retailer that, at its peak, operated more than 2,500 grocery stores and 700 drug stores in 37 states with approximately 230,000 associates. Supervalu granted Cerberus a license to continue to operate Cerberus-owned stores under the Albertsons banner. It was ranked number four in sales by Supermarket News — behind Wal-Mart, Kroger and Costco, with only Kroger having more stores.

History

Beginning

Albertsons was founded by Joe Albertson in 1939 in Boise, Idaho, USA. An ad in the Idaho Statesman touted Joe Albertson's first store as "Idaho's largest and finest food store." The store was filled with perks that, at the time, were brand new: free parking, a money-back guarantee, even an ice cream shop. The store was located at 17th and State Streets in downtown Boise.

In 1969, it partnered with Skaggs Companies, Inc. to create the first combination grocery/drug store. Later, Albertsons acquired Seessel's, Smitty's, Super One Foods, Buttrey Food & Drug, and Bruno's.

American Stores

In 1998, Albertsons acquired American Stores Company, which included the chains Acme, Lucky, Jewel, Jewel-Osco, Osco Drug and Sav-on Drugs. The Lucky stores were converted to Albertsons in November 1999, and the Lucky brand name was retired until April 2006, when Albertsons returned the Lucky brand name to their website due to a dispute with Grocery Outlet.

2000s

In 2001, Albertsons sold its free-standing Osco stores in the northeastern states to Jean Coutu Group, a Canadian drug store company. Those stores were rebranded as Brooks Pharmacy after the sale was completed in January 2002. In March 2005, Albertsons re-introduced the Osco brand name to the New England region by way of its Shaw's and Star Market pharmacies.

Albertsons exited the San Antonio, Texas, market in April 2002 by closing its 20 remaining area stores after already shuttering three other stores in December 2001. Albertsons was the area's second top grocer to market innovator H-E-B. At the time of the withdrawal, the 44-store H-E-B chain held a commanding 61 market share, while Albertsons held a 15 market share. Albertsons was the area's third top grocer before Kroger exited the market in mid-1993 when it closed its 15 area stores. Then, H-E-B's 37 area stores held a 43.2 market share, Kroger's 15 area stores a 13.7 share, and Albertsons 10 stores a 13.1 share.

Also in 2002, Albertsons sold its Seessel's supermarket chain in Memphis and parts of Mississippi to Schnucks, and pulled out of Houston, closing its 43 area stores after entering that market in 1990.

In 2004, Albertsons acquired Shaw's Supermarkets and Star Market Company from J Sainsbury plc for $2.5 billion.

Acquisition of Albertsons

On January 23, 2006, Supervalu, CVS/pharmacy, and an investment group led by Cerberus Capital Management announced they had agreed to acquire Albertsons for $17.4 billion in cash, stock and debt assumption.

As of June 2, 2006, the company's retail stores have been divided as follows:

• Supervalu has acquired 1124 stores in the deal, including:
• *Acme (134 locations)
• *Acme Express, Jewel Express, and Albertsons Express (107 fuel centers)
• *Albertsons (564 locations)
• *Bristol Farms (11 locations)
• *Jewel and Jewel-Osco (198 locations)
• *Lazy Acres (1 location)
• *Max Foods (4 locations)
• *Osco Pharmacy and Sav-on Pharmacy (906 pharmacies)
• *Save-A-Lot (2 stores franchised by Shaw's)
• *Shaw's (188 locations)
• *Star Market (20 locations)
• *Super Saver Foods (1 location)
• *Distribution centers (11 centers)

• CVS has acquired all (approximately 702) of the stand-alone Osco Drug and Sav-on Drugs rebranding them all as CVS/pharmacy.

• The Cerberus-led group acquired:
• *Albertsons (655 locations)
• *County Line Liquor (1 location)
• *Grocery Warehouse (1 location)
• *Jewel-Osco (2 locations)
• *Max Foods
• *Super Saver Foods

The agreement also included terms for dividing up distribution centers and other real estate and support operations, as well as the sale of 26 Chicago-area Cub Foods from Supervalu to the Cerberus-led investor group. Since Cerberus has taken control of the Cub Foods locations, Cerberus has announced that four locations (Algonquin, Bedford Park, Chicago and Naperville) will be closed by June 24, 2006.

After Acquisition

Supervalu has publicly stated that Albertsons will continue to have a presence in Boise, Idaho, for a three-year period from the date of acquisition, but has not stated which functions will remain permanently in Boise, Idaho, or transitioned to Eden Prairie, Minnesota.

Albertson's, Inc., is no longer a separate publicly traded company and has been removed from the NYSE. Albertsons will only exist as a nameplate for the grocery stores acquired by Supervalu and Cerberus. New Albertson's, Inc., has become the successor company to Albertsons according to SEC filings. [link] Albertsons LLC was also formed as part of the reorganization of assets and liabilities and will eventually be led by the Cerberus group.

Chains

• Acme (134 locations)
• Acme Express, Albertsons Express, and Jewel Express
• Albertsons (1219 locations)
• Bristol Farms (11 locations)
• County Line Liquor (1 location)
• Grocery Warehouse (1 location)
• Jewel and Jewel-Osco (200 locations)
• [Lazy Acres] (1 location)
• Max Foods
• Osco Drug and Sav-on Drugs (702 locations)
• Osco Pharmacy and Sav-on Pharmacy (906 pharmacies)
• Save-A-Lot (2 locations; franchised by Shaw's)
• Shaw's (188 locations)
• Star Market (20 locations)
• Super Saver Foods

Brands

Albertsons owns several store brands ("private label" brands), often bearing the name of the chain sold under, e.g. "Jewel" brand products in the Jewel and Jewel-Osco locations. It also introduced an upscale private label brand by the name of Essensia in 2003, which is sold across its chains.

Technology

Albertsons was increasingly progressive in the area of technology, having in recent years added a "check out while you go" system, where shoppers scanned items as they shopped and quickly paid before leaving.

Albertsons had also offered (in certain areas) its customers the option to shop from home via the company's website, [www.albertsons.com]. Pickups were arranged at the store, or the items were delivered to the customer's home. In areas where this program was in effect, it was widely advertised over television and radio by corporate spokeswoman Patricia Heaton.

Unions

Albertsons had contracts with the United Food and Commercial Workers (UFCW), the largest grocery union in the United States. In late 2003 and early 2004, Albertsons, along with competitor Ralphs (owned by Kroger), locked out its workers who were members of the UFCW in Southern California, in sympathy with competitor Vons (owned by Safeway), whose UFCW workers were on strike. The issues in contract negotiations included health care benefits and wage structure. The UFCW lost its bid to keep its benefit and wage language in the contract intact, a reflection of how former Albertsons management viewed the developing Wal-Mart Supercenter situation in Southern California. At present, starting wages and benefits given to new Albertsons employees are lower than those of employees hired before the labor dispute. Employee approval continues to decline with the increasing distance in associate and corporate relations (as of 2006).

Litigation

On May 31, 2006, Albertsons agreed to pay a $2 million fine to settle a consumer-protection case brought by three California counties and the city of San Diego that accused the supermarket chain of overcharging consumers by improperly weighing salads and bulk food items. [link]

External links

• [Official site], including [history] and [announcement of sale]
• [The New Supervalu], summarizing the impact of the Albertsons acquisition
• [Site critical of the company's sale]