The story
Founded by Joe Albertson in 1939.1
Beginnings
Albertsons was founded in 1939 by Joe Albertson (1906–1993) on July 21 in Boise, Idaho. An ad in Boise's Idaho Statesman newspaper touted 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, and even an ice cream shop. The original store was built onto several times, but it was demolished in 1979, and a replacement store was built on the same property. A brick monument stands on the northwest corner of 16th and State Streets in downtown Boise, commemorating the original store.
The grocery store was an enormous success, and Albertson reinvested his profits back into the business. New stores were opened in neighboring towns to the west: Nampa, Caldwell, and Emmett, before America's entry into World War II in late 1941. The company grew steadily in the years following World War II. When Albertson was considering putting a new store in a town, he would drive around the town and look for neighborhoods with children's clothing hanging on clotheslines, and station wagons in driveways; he knew that those kinds of neighborhoods were where he wanted to build his stores.
Albertson's, Inc. became a public company in 1959, and its growth continued, opening its hundredth store in Seattle in 1963. in 1964, Albertsons expanded to Southern California by acquiring All American Markets, a small chain based in Orange County.
In 1967, Albertsons expanded into Colorado, acquiring eight stores from Furr's Supermarkets. By the end of the 1960s, Albertsons operated over 200 stores within a nine-state region and the stores averaged about 20,000 square feet in size.
Partnership with Skaggs and 1970s expansion
In 1969, Albertsons partnered with Skaggs Drug Centers, owned by the Skaggs Companies, Inc., to create the first combination food/drug stores, first in Texas. The partnership was a tremendous success for several years. The partnership ended due to the fact that it was getting more difficult to control. Neither partner could buy the other out, and the partnership was dissolved amicably in 1977. Skaggs kept stores in Texas, Oklahoma, and Arkansas, and Albertsons kept stores in Florida, Alabama, and Louisiana, as well as some Texas stores (based in San Antonio).
Albertsons continued to expand its base in the West during this time. In 1973, Albertsons opened its first distribution center in Brea, California. In 1974, Albertsons bought the four-store Monte Mart chain in northern California.
Albertsons bought Fazio's Shopping Bag in 1978 from Fisher Foods, adding 46 stores in Southern California.
Expansion in the 1980s
In 1981, Albertsons entered Nebraska and South Dakota.
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In 1982, Albertsons reorganized its management into four regions: California, Northwest, Intermountain, and South. Albertsons continued to add stores in the 1980s, building or acquiring about 283 stores during the decade. Albertsons continued to expand in Texas beyond the Skaggs base in north Texas and San Antonio, re-entering the Dallas–Fort Worth market in 1984, and adding three Skaggs-Alpha Beta stores in Austin within months after entering that market in early 1989 with the acquisition of six Tom Thumb stores.
Albertsons built its first fully mechanized distribution center in Portland, Oregon, in 1988.
In 1989, Albertsons opened its 500th store, in Temecula, California.
Expansion in the 1990s
Albertsons began to expand heavily in the 1990s. In 1992, Albertsons bought the stores American Stores (formerly Skaggs Drugs Cos.) had in Texas, Oklahoma, Arkansas, and Florida. Many of the stores had been opened as Skaggs Albertsons originally (later turning into "Skaggs Alpha Beta" under American Stores ownership) but by 1991 had been rebranded as Jewel-Osco. These included a few stores that American Stores opened in the late 1980s under that name in Florida. Additionally, a non-food distribution center in Ponca City, Oklahoma, was purchased from ASC.
In 1994, Albertsons would acquire four stores from San Diego County chain Big Bear Markets.
The Skaggs acquisition was a success, and the new stores were integrated into Albertsons's Southern division. In a series of acquisitions in the late 1990s, Albertsons purchased Seessel's and 14 other stores from Bruno's, Buttrey Food & Drug (divesting seven Buttrey stores and six Albertsons stores to Smith's and another two Buttrey stores to SuperValu), the Springfield, Missouri Smitty's chain, and three Super One Foods stores from Miner's Inc. in the Des Moines market, all while building new stores across all divisions. These acquisitions brought Albertsons into five new states: Georgia, Iowa, Missouri, North Dakota, and Tennessee.
Albertsons Express gas stations
Albertsons launched a new branch of their brand in 1997, Albertsons Express, which included a fuel center and a convenience store. The first of the Albertsons Express opened that year in Eagle, Idaho. This branch was constructed in front of the parking lot of Albertson's full-size grocery store at Eagle Rd and Plaza Dr. This concept was not limited to Idaho; it expanded to locations across America located on Albertsons’ existing/new stores properties. A few of the locations with Express Gas Stations include Gresham, Hillsboro, and Portland in Oregon; Houston in Texas; and Casper and Cheyenne in Wyoming.
American Stores acquisition
In 1998, Albertsons made its largest acquisition to date, American Stores Company, which included the chains ACME in Pennsylvania, New Jersey, Maryland, and Delaware; Lucky in California and Nevada; Jewel and Jewel-Osco in Illinois, Indiana, and Iowa, and two drug store chains: Osco Drug, with a presence in New England, the Midwest, Montana and Arizona; and Sav-on Drugs, with a presence in Southern California, Nevada, Western Arizona, and New Mexico. The acquisition briefly made Albertsons the largest American food and drug operator, with over 2,500 stores (including stand-alone drug stores) in 37 states, until Kroger's acquisition of Fred Meyer closed the following month. To make the acquisition, Albertsons was forced by anti-trust concerns to divest 146 stores in California, Nevada, and New Mexico to Certified Grocers, Raley's, Ralphs, Stater Bros., and Vons. In California, Nevada, and New Mexico, there were already Albertsons stores, so in order to not have two banners in the same area, 508 Lucky stores were converted to the Albertsons banner in November 1999, and the Lucky brand name was retired. The brand was reintroduced in the mid 2000s.
In January 2001, Albertsons restructured its "districts" to a divisional structure mostly based around distribution centers, with a drug store division and 18 regional division offices.
2001–2004 restructuring
On July 18, 2001, Larry Johnston, the new chairman and CEO of Albertson's, announced it would close 165 "underperforming" stores spread across 25 states, cut jobs, and reduce its newly created operating divisions. The first change was that the Utah, Idaho, and Big Sky (Montana) division were merged back into Intermountain, while Oregon, Washington, and the Inland Empire (eastern Washington and Northern Idaho) division would be consolidated back into a single Northwestern division. Albertsons sold its freestanding Osco Drug stores in New England to Jean Coutu Group, a Canadian drug store company (those stores were re-branded as Brooks Pharmacy after the sale was completed in January 2002). In 2001, the short-lived Des Moines stores would close as well and Albertsons began to issue Albertsons Preferred Savings Cards for all of its stores.
The following year, three more divisions were closed entirely:
San Antonio: Having been in San Antonio since the Skaggs Albertsons days, at the time Albertsons was ranked as the area's number two grocer by market share, compared to H-E-B's top position in the market. At the time of the withdrawal, the 44-store H-E-B chain held a 61 percent market share, while Albertsons held a 15 percent market share. Albertsons had held the third position at the time 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 percent market share, Kroger's 15 area stores a 13.7 percent share, and Albertsons's 10 stores a 13.1 percent share. The remaining stores in the San Antonio division, primarily in the Austin area, became part of the Dallas division. The last store in South Texas to close, a store in Victoria, was closed in October.
Mid-South: In 2002, Albertsons shuttered its Mid-South division by selling its Seessel's supermarket chain in Memphis to Schnucks and stores in Mississippi to Brookshire's. The Albertsons-branded stores in the Nashville area, most of which had previously been Bruno's stores under the Foodmax banner, were sold to either Publix (marking its entry into the market) or Kroger. The Chattanooga area stores were all shuttered.
Houston: After entering the market in the early 1990s, Albertsons closed its 43 Houston-area stores, with most reopening as Kroger or Randalls (acquired with Safeway in 2015 and subsequent return to Houston), with two of them becoming H-E-B stores. The Louisiana stores from that division joined the Florida division (though they would move to the Dallas division soon after), while the stores in the Bryan–College Station area became part of the Dallas division. The Greater Houston distribution center near Katy, built in 1996 was sold to 99 Cents Only Stores in 2003.
Additionally, the distribution center in Tulsa, Oklahoma, (home of the Great Plains division) was sold to Fleming Companies, though no stores were closed. The Great Plains division stretched all the way into Omaha, Nebraska. The sale of the distribution center included a distribution deal for Fleming to continue to supply Oklahoma and Omaha. Albertsons sold its locations in southwest Missouri to Missouri-based Ramey/Price Cutter.
After stabilizing the company's finances and consolidating divisions in 2004, Albertsons acquired Shaw's Supermarkets and Star Market from Sainsbury's for $2.5 billion. Albertsons also purchased Bristol Farms for $135 million. During the same time, Albertsons exited the markets of Omaha, where it closed or sold 21 stores, and New Orleans, Louisiana, where it closed seven, selling four to A&P, which converted them to Sav-A-Center.
Sale to Cerberus and SuperValu
The acquisition spree caused significant problems for Albertsons. Many of the acquired chains had systems that did not mesh well with Albertsons. Financing those acquisitions required Albertsons to take on significant debt. Added to those problems were significant changes in consumer buying patterns, including new competition from large discounters such as Walmart and Costco that impacted sales.
After several assessments of the company and months of rumors, it was announced on January 23, 2006, Albertsons was to be sold to a consortium of companies. SuperValu would take the bulk of the company including the brand names and what was considered to be the stronger divisions, including three Albertsons divisions: the Southern California division (Southern California; Southern Nevada; along with stores in Hanford and Tulare, in Northern California), the Northwest division (Oregon except Ontario, Washington State, and the Idaho Panhandle), and the Intermountain division (Southern Idaho; Elko, Nevada; Utah; Jackson and Rock Springs, Wyoming; Montana; Ontario, Oregon; and North Dakota) as well as the ACME, Bristol Farms, Jewel-Osco, and Shaw's Supermarkets and Star Market brands. This acquisition would also lead to SuperValu gaining access to over 100 Albertsons Express fuel centers.
CVS would acquire 702 stand-alone Osco and Sav-on Drug stores and converted them to CVS Pharmacy stores. They also closed about 100 of the 702.
What was left of Albertsons Inc. became Albertsons, LLC, purchased by a Cerberus-led group of investors, and CVS Pharmacy. The acquisition was completed on June 2, 2006, with the Cerberus-led group (who also included Kimco Realty Corporation, Schottenstein Stores Corp., Lubert-Adler Partners, and Klaff Realty). They held Albertsons LLC as "AB Acquisition LLC". Albertsons LLC included 661 stores and the distribution centers and offices from five of Albertsons divisions. These five divisions were thought to be Albertsons' five weakest divisions, and conventional wisdom in the industry was that the stores would eventually be closed or sold to other operators.
As of June 2, 2006, the company's retail stores were divided as follows:
SuperValu had acquired 1,124 stores in the deal, including:
ACME (134 locations)
ACME Express, Jewel Express, and Albertsons Express (107 fuel centers)
Albertsons (564 locations in Southern California, Idaho, Montana, Nevada, North Dakota, Oregon, Utah, Washington and Wyoming) – New Albertsons Inc. (later sold to Albertsons LLC)
Bristol Farms (11 locations)
Jewel and Jewel-Osco (198 locations)
Lazy Acres (1 location)
Max Foods (4 locations) (3 converted into Lucky, 1 became Albertsons in July 2006)
Osco Pharmacy and Sav-on Pharmacy (906 in-store pharmacies)
Save-A-Lot (2 stores franchised by Shaw's)
Shaw's (169 locations)
Star Market (20 locations)
Distribution centers (11 centers)
CVS acquired all (approximately 702) of the stand-alone Osco Drug and Sav-on Drugs rebranding them all as CVS Pharmacy, though they closed approximately 100 of the acquired stores. Many CVS locations were close to Sav-on stores. CVS also acquired one distribution center.
The Cerberus-led Albertsons LLC retained:
Albertsons (655 locations in Arizona, Northern California, Colorado, Florida, Louisiana, New Mexico, Oklahoma, Texas, and Wyoming – Albertsons LLC)
County Line Liquors (1 location)
Grocery Warehouse (1 location)
Jewel-Osco (2 locations)
Max Foods (2 locations)
Super Saver Foods (23 locations, 21 closed in late 2006)
Following the sale, Albertson's, Inc., was removed from the NYSE. Albertsons LLC was technically the successor company to Albertsons according to SEC filings but it was New Albertsons Inc. that assumed most of the debt, got most of the property, and transitioned Albertsons stock into SuperValu stock.
The five Albertsons Inc. divisions that remained as Albertsons LLC were the Dallas/Fort Worth division (Texas excluding El Paso, Oklahoma, Louisiana, and Arkansas), the Rocky Mountain division (Colorado, Wyoming excluding Rock Springs and Jackson stores, Nebraska, and South Dakota), the Southwest division (Arizona, New Mexico and El Paso, Texas), the Florida division (Florida), and the Northern California division (northern California excluding Hanford and Tulare stores, and northern Nevada). Albertsons LLC then concentrated on rebuilding market share and its store base in its stronger areas and divesting stores and other property in its weaker areas.
On June 6, 2006, only one week after Albertsons LLC was created, the company announced its intent to close 100 Albertsons stores by August 2006, including all but two Super Saver stores. Those closures were spread across all five divisions. Soon after, the company announced that it would be shutting down its online delivery service on July 21, 2006. To distinguish the two companies, Albertsons LLC created a second website, AlbertsonsMarket.com.
A leaner company
In November 2006, it was announced that the Northern California division, consisting of stores located in northern California and northern Nevada, would be sold to Save Mart, with the deal closing in late February 2007. The company gradually converted all the stores to its Save Mart banner over summer 2007, except for stores in the San Francisco Bay area, which were rebranded as Lucky. The deal included two Northern California distribution centers. Most of the Albertsons locations had originally been branded as Lucky before Albertson's 1998 purchase of American Stores.
Most of the changes in the next six years would downscale the remaining divisions. In the Dallas–Fort Worth division, in 2007, the distribution center was sold and outsourced to Associated Wholesale Grocers, and Albertsons would exit both Oklahoma and Austin. The Oklahoma stores were sold to Associated Wholesale Grocers members while the Austin stores were sold to H-E-B. With the closures, only four stores south of the Dallas–Fort Worth area existed in Texas, all of which were closed or sold by December 2011. Additionally, many of the Dallas–Fort Worth metroplex stores closed during this time, even into 2011.
In June 2008, Albertsons LLC entered into an agreement with Lakeland, Florida-based Publix stores to sell 49 Florida Albertsons locations to the chain. This included 15 stores in Northern and Northwest Florida, 30 locations in Central Florida, and four locations in South Florida. The sale was completed in September. In April 2012, the company closed most of its stores in Florida. The Plant City distribution center was sold to Gordon Food Service though the Florida Division continued to be located there. By April 2012, only four stores remained in the entire state of Florida.
The Rocky Mountain division slowly shed stores. By April 2007, there were only 32 stores left in the state of Colorado. In December 2007, SuperValu acquired the eight remaining Wyoming locations from Albertson's LLC not already owned by the company. These stores continued to operate under the Albertsons banner. 2008 also brought the sale of Albertsons' lone South Dakota and Nebraska stores to Nash Finch. In August 2009, the distribution center and division office closed and the 26 remaining stores moved to the Southwest division.
Only the Southwest division was spared the major cuts suffered by the other divisions. On June 12, 2007, Albertsons LLC agreed to acquire all Raley's locations in New Mexico. The acquisition includes one closed and eight operating stores in Albuquerque and one store in Taos, thus doubling Albertsons store base in the Albuquerque metro.
In June 2007, Albertson's LLC decided to discontinue its Preferred Savings Card Program, choosing instead to offer discounted items to all of its customers. In September 2007, all Albertsons stores in the Dallas/Fort Worth, Texas, and Florida markets began collecting their Albertsons Preferred Savings Cards.
End of the first generation of Albertsons Express
Beginning in 2008, Albertsons began exiting the fuel business, selling 72 of over one hundred Albertsons Express gas stations to Valero Energy, which converted most of them to Corner Store locations. It would not be until 2011–2013 that most of the Albertsons Express locations were divested under the Supervalu company. Even then, some locations including Hillsboro still displayed Albertsons Express banners.
New Albertsons acquisition
While Albertsons LLC had restored its stores to profitability, SuperValu's New Albertsons Inc. had done poorly. While SuperValu did remodel many stores and open a few new stores, New Albertsons had shrunk. Of the 1100+ stores SuperValu acquired in 2006, fewer than 900 remained by 2013. Under SuperValu, Bristol Farms had been sold off, 36 Utah stores were sold to Associated Food Stores (leaving just three traditional Albertsons stores in the state), the Wisconsin Jewel-Osco stores had been sold or closed, as well as the Shaw's stores in Connecticut. Additionally, like Albertsons LLC, most of the fuel stations had been shuttered or sold to other operators.
From Wikipedia’s article on Albertsons, shared under CC BY-SA 4.0.8