For the employees, it's a bad move. Safeway is unionized while Albertson's is not. Cerebus Capital has a history of closing stores that don't perform to their standards, so many lives are liable to be changed and disrupted. Big business doesn't care about their people's lives. Costco seems to be a notable exception, though.
It was not one of those acquisitions where companies make effort to buy a competitor. Safeway was pretty much going out of business and was put on sale last month.Of course it was an opportunity for Albertson, so they bought it, as they compete with Kroger in # nationwide stores.
The growth in food/grocery industry is directly proportional to the population growth, so it is a slow growth industry. When these folks embark on such mergers/acquisition spree, it has everything to do with the business, not really the consumers. When they become 'powerful' giants, they have the power to negotiate on procurement, marketing and distribution costs, which otherwise could be a big expense. This is a bad move for consumers.There are not many companies who actually prepare to change their business culture. Whoever eats up whoever dominates. It is the consumer who has to figure out a way to deal with the change. As a consumer, I found Safeway much more 'service' driven than Albertson. So, I wont view it as anything exciting or a 'great move'. I could be wrong, but that is my experience.
Good, bad or indifferent to WHOM? Employees? Shareholders? Consumers?
For 22 years I have lived in a large urban west coast city. We don't even HAVE Albertson's in the city. Albertson's are kind of low-brow and out in the less expensive burbs.
Safeway is everywhere.
Last year I moved to the "burbs" and bought a couple acres so I could have a horse. I have never seen such economic disparity in Safeway stores as I have here.
In one neighborhood where there is more money (white people) the Safeway is HUGE and new and pretty and has all the conveniences like bank, video, propane refill, blah blah blah.
A mile away, on the other side of the proverbial tracks, the Safeway is ancient. It's small, crowded, has crappy merchandise, small selection, and the lines are literally down the aisles because they don't staff the store appropriately to handle the volume of customers.
It makes me SICK that in a neighborhood with lower socio-economic demographics, Safeway (the "moral Mormon" company) will skimp on customer service. I guess if customers are BROWN and have to take the bus (nowhere else to shop), suck it, they can stand in line like cattle at the end of their work day.
So in a nutshell, living in the city I was pretty much a Safeway fan. Now that I see how they do things, I really LOATHE Safeway.
And Albertson's isn't even on my radar. That is a totally low-brow grocery store that I'm surprised has the money to pay their employees let alone buy SAFEWAY.
QFC (Kroeger), Whole Foods, Puget Consumer Coop, Trader Joe's, there are lots of options on every corner. So if one crappy store (Albertson's) wants to buy another crappy store (Safeway), WHO CARES?
Evidently the Albertsons board thinks it is a good buy for increasing profits for the stockholders. The stockholders are the main concern in these deals.
Actually, Albertsons might be achieving a little monopoly in some locations and be able to increase pricing. The consumer gets screwed in the end either way.
I think you meant to say Cerbeus Capital bought Safeway for about $7 billion. More consolidation is bad for consumers.
I have mixed feelings about it. The latest I heard is that, another company wants to buy it, but Safeway is concerned that letting (Crogers?) buy it might cause conflict.
big business - one up man's ship
