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Albertsons Pharmacy

BOISE, IDAHO -- Albertsons took on two distinctly different grocery formats last month in a strategic move to differentiate itself from rivals in an increasingly competitive food retailing market. The company acquired the 11-store California gourmet food chain Bristol Farms and debuted a new price-impact format under one of its existing Super Saver banner in the Dallas and Baton Rouge, La., markets.

In announcing the acquisition of Bristol Farms, ceo and president Larry Johnston called the deal yet another example of how Albertsons is seeking out new growth segments. This may be a smart move, given that conventional supermarkets continue to lose share to alternative formats such as supercenters, clubs and dollar stores.

"This acquisition is the latest example of our dedication to diversity into new formats that can accelerate growth, tap into new customer segments and maximize return on invested capital," Johnston said.

Bristol Farms became a wholly owned but independent subsidiary of Albertsons, much the same way the company set up Extreme Inc. to launch the price-impact format. Kevin Davis will continue as Bristol Farms' president and ceo.

Meanwhile, the first seven new-look Super Saver price-impact grocery stores opened last month in converted Albertsons stores. The new format is unrelated to Albertsons Hispanic grocery format in California, despite use of the same name. The price-impact stores stock 18,000 food, drug and general merchandise items as opposed to a typical Albertsons store with 30,000 or more SKUs. Each of the seven stores includes a pharmacy, and all are open 6 a.m. to 11 p.m.

"We think we can attract all demographics based on our price model: low prices and good quality," Jim Kaiser, marketing director at Extreme, told Food Retailing Today.

Kaiser said the strategy involves buying in quantity high-demand items. The merchandising is low frills to keep prices down, with most goods left in package boxes and bagging done by customers. Half of the registers are self-checkout. The format is similar to other price-impact stores in Dallas, such as Save-A-Lot, Super 1 Foods, Sack 'n Save and Fleming's former Rainbow Foods banner.

Super Saver features all traditional grocery categories, but without deep selections. High-demand items are merchandised in bulk, especially on endcaps that may have cases of canned goods stacked up 10 feet high or more, similar to club stores. The meat section provides additional discounts for bulk package sizes. Deli meats are all priced the same, $3.99 per pound. In addition to these everyday low prices, the store will offer promotional pricing on featured items called "Price Plunge," such as $1.79 for a 12-pack of Shasta soft drinks. In addition, a "Wall of Values" upon entrance to the store showcases the store's best deals. At one store in Mesquite, Texas, extra emphasis was given to Hispanic food items.

Another element of Super Saver is a dollar-store aisle with all items priced at a buck. Categories in this section include food, health and beauty aids, stationery, kitchen housewares, party items, cleaning supplies and other general merchandise goods.

As for expansion of these two concepts, Albertsons has not divulged its plans. Kaiser said Extreme would consider both store retrofits and acquisition of recycled retail space in its eventual growth plan for Super Saver price-impact stores.

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