Safeway plans closings (Texas)

Dallas Morning News ^ | Oct. 19, 05 | KAREN ROBINSON-JACOBS

[PAR35]

Safeway, based in Pleasanton, Calif., said it will close 26 underperforming stores by year's end, including nine Tom Thumb stores in Dallas-Fort Worth. It will also shutter 16 Randalls stores in Houston and one in Austin.

That will leave Safeway with 62 stores in Dallas-Fort Worth, 36 in Houston and 14 in Austin. It plans to remodel many of the remaining Texas stores to create so-called lifestyle centers, with higher-end products

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Analysts viewed the closings as a better alternative than exiting the market – an option never suggested by the company but repeatedly mulled by industry observers.

They also pointed to Safeway's plans to remodel stores as a sign that it aims to make a game of it against Wal-Mart Stores Inc. and San Antonio-based H.E. Butt Grocery Co.

"Considering all the options that have been on the table ... I think closing a few stores speaks volumes about their confidence in being able to turn the remainder of them into profitable stores," said Mark Husson, an analyst with HSBC Securities.

In a note to investors, research analyst Edward J. Kelly of Credit Suisse First Boston called the Texas division "challenging" but labeled the closings a positive.

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In recent years, Tom Thumb and Randalls have faced increased competition and lost market share, prompting rumors that the Texas chains were for sale.

In 2003, Safeway took a noncash goodwill impairment charge of $704.2 million for its 134 Texas stores.

Tom Thumb lost market share in Dallas-Fort Worth as shoppers complained about changes in food offerings.

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[PAR35]

Yes, it is always a good sign when your customers are complaining about change and you shove more of it down their throat.

As they say in Dallas - shop Tom Thumb - Safeway quality at Simon David prices.

[Dan Nunn]

If I had the choice between Tom Thumb, and H.E. Butt, well, I don't know...

[labette]

Our local Safeway died twenty years ago, maybe more.
Back then, they were union. Check-out girls made about twelve bucks an hour, compared to five dollars or so everywhere else. The stores were clean, but the other chain stores could clean their clock on price.
This was the days before the Wal-Mart super centers.{Locally} I'm curious, is Safeway still union?

[labette]

Our local Safeway died twenty years ago, maybe more.
Back then, they were union. Check-out girls made about twelve bucks an hour, compared to five dollars or so everywhere else. The stores were clean, but the other chain stores could clean their clock on price.
This was the days before the Wal-Mart super centers.{Locally} I'm curious, is Safeway still union?

[labette]

Oops! Oops!

[Clemenza]

The ones in Washington State are still Union. As for myself, I shop Trader Joe's (non-union) for most of my dry goods, frozen goods, and dairy, buy my fish at an independent fish market and my produce at the greenmarket. Better quality than Safeway and QFC (Kroger) and cheaper too.

[LA Woman3]

It's HEB's fault!!

[Clemenza]

HEB in Del Rio had an excellent wine selection for a small border town.

[altura]

I love my Tom Thumb Flagship store. I will be totally bummed if it closes.

[AZLiberty]

I used to shop pretty regularly at the Safeway in Tempe, but lately they've converted all their stores to the "lifestyle" stuff. What this means is they laid down rough wood floors in the produce department, and raised their prices 20%.

I'm sure some segment of the population thinks this is a good trade-off, but it doesn't include me.

My shopping strategy is this: if it's on the short list of things I buy and it's on sale, I buy as much as I have room for at home. If it's not on sale, I might buy one -- if I absolutely need it.

And then there's the list of things I buy at Trader Joe's, because they never have sales. The latest addition to that list is their frozen organic broccoli. It's a little more expensive than their regular broccoli or store-bought fresh broccoli, but it's very easy to prepare and it's always good.

[PAR35]

If I had the choice between Tom Thumb, and H.E. Butt, well, I don't know...

The HEBs in Dallas are "Central Market" format. Very high end. No regular cereal or canned goods for example, but all of the exotic, luxury and import items you can imagine.

[LA Woman3]

I grew up in Texas and have lived in Missouri and now Louisiana. I miss my HEB!!

[PAR35]

is Safeway still union?

I don't know about the ones in Texas. The ones in Calif. are.

[BurbankKarl]

Exactly what they are doing to the Vons and Pavillions stores in So Cal....They had a case of bottled water for $49! Now reduced to $42! I buy whatever I can at Wal-Mart when I am up in my brother's neighborhood, and only fresh stuff at Vons....the meat prices are insane.

>>>I used to shop pretty regularly at the Safeway in Tempe, but lately they've converted all their stores to the "lifestyle" stuff. What this means is they laid down rough wood floors in the produce department, and raised their prices 20%.

[Doctor Stochastic]

Perhaps H.E. Butt Grocery Co. will just merge with Piggly-Wiggly. The Wiggly-Butt stores would be hard to compete with.

[zlala]

When you get back ping. You'll like #15 I'm sure!

[Texan]

Thanks for the laugh. I really did LOL.

[Texan]

Thanks for the laugh. I really did LOL.

[shteebo]

[but lately they've converted all their stores to the "lifestyle" stuff. What this means is they laid down rough wood floors in the produce department, and raised their prices 20%.]

They did exactly that at the store in our Seattle burb. Not sure who they're aiming at, but it's not us. There are better upscale markets and also better giant discount markets nearby. We don't go there half as often as before.

[McLynnan]

Wish we had some choices. HEB drove all the competition out of town in the Waco market. We have HEB and Super WalMart. Oh, and one older, smaller, overpriced Albertson's.