It’s a complex game — recasting the identity of 146 former Safeway and Albertsons grocery stores and 106 of their pharmacies.
So says John Clougher, Pacific Northwest CEO at Bellingham-based Haggen Food and Pharmacy.
It’s not just about hanging new signs, or retaining staff, or ensuring that a new cash-management system can recognize the weight of an apple or the price of a peach pie.
Will the new Haggen-branded pharmacies transfer prescriptions from former Safeway and Albertsons drug departments? Will the store-branded gas stations honor previous rewards programs? How should a new brand position itself in the tightly competitive grocery sector?
At an undisclosed price — Haggen is privately held and not required to disclose figures — the grocer with fewer than two dozen stores suddenly grew by a factor of eight with the purchase of 146 Safeway and Albertsons stores, and 106 pharmacies, throughout the West. The deal was precipitated by the merger of Albertsons and Safeway and it was approved in January by the Federal Trade Commission.
Clougher would only say that the transaction was “well north of one hundred million” dollars.
Conversions have begun and will continue for a predicted total of 120 days.
The first Tacoma-area store, a Safeway at 4831 Point Fosdick Drive, will close Sunday (March 8) at 6 p.m. and reopen under the Haggen marque on Tuesday (March 10) at 4 p.m. Other conversions will follow, with the final area store, in Milton, reopening June 6.
In a recent interview, Clougher said he plans to position the brand “right in the middle of a Safeway and a Whole Foods. Haggen has the opportunity to offer all the everyday, legend items, such as Frito-Lay, and we also have expertise in fresh, natural and organic. We’re everything under one roof.”
The two-day conversions at each store will include changes both cosmetic and among the items offered for sale. Haggen sells some 500 items under its own store brand, and Clougher said he intends to expand the stock of fresh-from-scratch bakery items.
“We feel we compete with the conventional supermarket, and when we convert these stores we expect little change in the grocery aisle,” he said. “We plan on bringing in thousands of new items to complement on the Northwest Fresh side.”
Clougher is proud, he said, that positions have been offered to former Safeway and Albertsons employees, and that all have decided to move to the new brand.
“We’ve set this up where we want 100 percent retention,” he said.
Where some grocery insiders have speculated that the Safeway-Albertsons deal was more about the acquisition of real estate and shopping center leases, Clougher said it was “100 percent as a grocery play. Our complete business plan relates to running grocery stores. (That is) our expertise and ability.”
One of Clougher’s primary concerns, he said, is serving pharmacy clients. Although a store might be closed for renovation, its pharmacy will schedule some open hours. Customers can expect further information about insurance plans in coming days.
The gas stations, if any, will be operated by a vendor, and previous rewards programs will be discontinued. Starbucks kiosks will be retained, and like bank kiosks, may be refreshed during the conversions.
“We feel our strategy is to protect the business that’s there, and connecting with employees. We have a commitment to stay true as a grocer and sell the products that the consumer wants, with an emphasis on fresh, organic and local.”
As the conversion begins, he said, “We’re ready.”