Updated: July 17, 9:30 a.m.
Why a well-known grocery chain in the Pacific Northwest would agree to acquire 146 stores from Albertsons and Safeway is a business decision once analyst believes will end up costing the company.
"You have to think about where Haggen's was and where they are trying to get to," David Livingston, a supermarket researcher with DJL Research in Milwaukee, told KNPR's State of Nevada. "They had 18 stores up in Washington (and Oregon) and all of a sudden they add in excess of 160 stores. That's a lot of growing pains ... a lot of new responsibility."
Livingston said he was sure Haggen's was moving into markets, including Las Vegas, they have no knowledge about.
"You know if they were going to remake the movie The Sting, they could make it about how Albertsons and Safeway set up Haggen to take these stores," Livingston told KNPR. "I don't think anybody realistically thought they could be successful with these stores."
Haggen also bought a number of Vons locations.
But, within its first few months of operation, Haggen is now laying off staff of cutting back employee hours at former Vons and Albertsons locations it acquired in Las Vegas, Henderson and Boulder City.
Virtually all Haggen employees were holdovers from the former owners.
“As we introduce Haggen throughout Southern California, Arizona and Nevada, our challenge is to establish and grow the brand in competitive new markets,” Haggen Southwest CEO Bill Shaner said in a statement emailed to KNPR’s State of Nevada.
Shaner said to ensure Haggen’s is operating as efficiently as possible, “we have made the difficult decision to temporarily cut back on staffing at our stores, with specific reductions varying by store.”
“We value the contributions these employees have made and are committed to treating all employees respectfully and professionally through this transition,” Shaner said. “Our focus moving forward is to continue to bring the complete Haggen experience to our stores – offering fresh, locally sourced products alongside everyday big brands – and establishing ourselves in the competitive grocery space.”
Shaner declined to comment on the number of employees laid off in Southern Nevada. The grocery chain also declined to comment beyond their the official statement.
Each of the Haggen stores in Southern Nevada averages about 100 employees.
Haggen Inc., a Bellingham, Wash. –based grocer, bought four Vons and three Albertsons stores in the area and converted them to Haggen. Terms of the deal were not disclosed.
The stores were remodeled and opened in June with new exterior and interior signs, along with other changes.
Last year, Albertsons and Safeway announced plans to merge and federal regulators forced the two companies to sell some of their stores to gain approval.
"Albertsons and Safeway wanted to make sure that when they sold those stores they would sell them to someone who wasn't going to compete," Livingston told KNPR. "They would sell them to someone they thought would fail."
Livingston said Haggen wasn't doing to well with the 18 stores it's already operating in Washington and Oregon.
Haggen agreed to buy 146 stores, increasing its company footprint from 18 stores in two states to 164 stores in five states. The company, which already had stores in Washington and Oregon, gained a presence in California, Arizona, and Nevada.
"Most of us in the industry believe someone was just over zealous when it came to the purchase of these stores," Livingston said. "You think when people would be investing millions of dollars they would have thought this through."
Livingston expected Haggen would en up closing or selling some of the stores it acquired in Southern Nevada, California and Arizona.
David J. Livingston, supermarket researcher, DJL Research
You won’t find a paywall here. Come as often as you like — we’re not counting. You’ve found a like-minded tribe that cherishes what a free press stands for. If you can spend another couple of minutes making a pledge of as little as $5, you’ll feel like a superhero defending democracy for less than the cost of a month of Netflix.