Albertsons keeps local focus with Haggen deal

Date : 15 March 2016

Albertsons has announced the acquisition of 29 stores from Haggen, 15 of which will be operated as a separate business unit under the Haggen banner.

Most stores acquired from Albertsons closed or divested

This deal sees a number of former Albertsons stores return to the company. At the end of 2014, Haggen acquired 146 stores which Albertsons and Safeway were required to divest in order to secure regulatory approval for their merger. This was a transformational deal for Haggen, which at the time only operated 18 stores. However, last October Haggen filed for bankruptcy protection having faced significant trading challenges in expanding its brand beyond its Pacific north-west heartland. Since then it has closed or sold most of the stores which were acquired, with companies including Gelson’s and Smart & Final acquiring a number of the locations.

New business unit includes 14 legacy Haggen stores

Following the closures and divestments Haggen had initially planned to operate a core group of 32 stores, but announced plans at the end of last year to auction these. This group of 32 included 17 legacy Haggen stores and others which had been converted to the Haggen banner. The stores being acquired by Albertsons include 14 historic Haggen units, which along with one converted location, will sit in a new business unit. The other stores will return to the Haggen banner.

Opportunity for Albertsons to take insights around local sourcing and marketing

The decision by Albertsons to retain the Haggen brand is consistent with its strategy across the US. The retailer’s operating model is based on creating a platform of scale while delivering a locally relevant offer through a network of operating banners. Haggen is a well-established brand in the Pacific north-west, and through the 'Haggen Northwest Fresh' store format it has been able to create a differentiated proposition and a large base of loyal shoppers. A new investment strategy for the brand under the ownership of Albertsons should help drive growth, while the business could provide the wider group with new insights around local sourcing and marketing.

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