How Not To Open A Grocery Store Chain In Southern California

If you are out of the Southern California area you’ve missed all the drama/fun/lawsuits/layoffs and other headlines about the small Northwest chain of Haggen Markets taking over 164 Albertson’s stores. What a mess.
The grocery business here has been quite fluid for many years. Kroger bought Ralphs and started filling the shelves with Fred Meyer products. They failed to market the Meyer products as being as good as what was already on the shelves. Fred Meyer disappeared. Safeway took over Von’s and immediately rearranged the stores according to a scientific analysis of which products are purchased together. Translation – nobody could find anything. Fortunately they sent the staff to charm school so they were very pleasant while leading us around the store to find our favorites.
Sprouts and Henry’s merged, and stayed Sprouts. No one noticed because the stores came from a common background. Trader Joe’s has been there for over 40 years – small but fun and with a dedicated following. We also have Stater Brothers, Smart and Final, Fresh and Easy, Food 4 Less, 99 Cent, Big Lots, Dollar Stores and similar which include food products among their wares; numerous Hispanic market chains including Vallarta, Northgate, and El Super; Asian specialty stores such as 99 Ranch Market; and many small chains such as Value Plus. All of these compete with Wal-Mart, Target, Sam’s Club, and Costco. Whew! That is a lot of competition. And into this saturated region Haggen Markets stepped.
Haggen was touted as a cross between an upscale Von’s Pavilion and a Whole Food Market. I envisioned bright, well stocked, and perhaps prices a little higher, but with quality foods, specialty products, and high level health foods. One day the store was an Albertson’s and the next it was a Haggen. No advertising, no balloons, no grand opening, no newspaper ads, but, well, I thought it was a soft opening, to get everything running smoothly and then they would have a big push. Except, there never was a big push. Nothing. I don’t live near a Haggen, but my mother does so I checked with her and the neighbors. No ads came in the mail or the newspaper. No announcement of a grand opening date, no balloons, no prizes, or any other enticement.
Still, we visited the Haggen near Mom’s. It looked like an Albertson’s with slightly different colors and a lot of Haggen brands on the shelves. By comparison, when the Ralph’s Market in my area closed and was taken over by the Vallarta chain the store was closed for a few weeks, they spent $5 million on a remodel, and there was a big opening celebration including a Chamber of Commerce ribbon cutting. The store is very busy. The Haggen’s near mom’s – you could bowl down almost any aisle today at 1:30 in the afternoon. At the same hour Ralph’s and Trader Joe’s stores were as busy as always.
Maybe it has to do with prices? The cheapest price for a dozen eggs was $4.99 for large size, regular eggs. Not cage free, not organic, not extra-large. Lean Cuisine meals were $3.99 each, except for 1 of the meals on clearance for 2 for $5. No other brands on special. Walking down aisles I didn’t see the tags I’ve come to expect at markets showing what is on special that week or what is a club price. Had I been alone I would have walked out, but I had my mom and her caregiver finishing lunch at a nearby restaurant and at least for today it was more important to buy the, fortunately, few items I needed and get back to them.
I haven’t studied marketing and don’t know the industry, but I am a consumer. You want my business you have to give me something extra – great prices; specials; club discounts; specialty products; atmosphere, and a feeling that you like me and really want my business. Make a big splash and let me know you are there.  Tell me why I should go to your store. Are you listening Haggen or is it already too late?
Every Day Is A Good Day VJ


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