(Sept. 23) BOISE, Idaho — Barely one month after announcing that it was diving into the so-called “price-impact” grocery store marketplace, Albertson’s Inc. is reaching out to upscale consumers.
The Boise-based grocery chain — the third-largest in the U.S., after Wal-Mart Stores Inc. and the Kroger Co. — announced Sept. 21 that it had acquired Bristol Farms, an 11-store chain in Southern California that features gourmet and specialty food items.
Albertson’s did not disclose terms of the deal.
Bristol Farms has built a solid position in the Southern California specialty, gourmet market segment with strong performance over the past several years, Larry Johnston, chairman, chief executive officer and president of Albertson’s, said in a news release.
All of the newly acquired stores will continue to operate under the Bristol Farms banner, with separate management operating independently from Albertson’s traditional operations.
Kevin Davis will continue as Bristol Farms’ president and CEO.
“This is just another way for us to get into a market where we’re already strong with a company that has a strong brand recognition in the area,” said Mike Beckstead, manager of investor relations for Albertson’s.
The move comes a little more than a month after Albertson’s announced, through its new subsidiary, Extreme Inc., the launch of a price-impact Super Saver chain, with the first seven stores in Dallas and Baton Rouge, La.
Produce dealers in Los Angeles say the purchase of Bristol Farms is a good move, with the major retail chains still trying to recover from a five-month strike that crippled business and drove some customers away permanently.
“What I’m hearing with the chain stores is, a lot of them have not recovered,” said John Underwood, co-owner of Los Angeles wholesaler Underwood & Wong Produce Inc.
But Beckstead said the purchase is not related to the strike.
Rick Lejeune, vice president of Los Angeles-based Heath & Lejeune Inc., which specializes in organic fruits and vegetables, said the buyout came as no shock to him.
“This is the trend in our industry,” Lejeune said. “They are a specialty type of high-end store that is a departure (from the trend). It’s not like buying Ralphs or Vons. It’s probably a smart move for them.”
Lejeune said Bristol Farms offers top-quality produce, as well as other items.
Ed Odron, president of Produce Marketing Consultants, a Stockton, Calif.-based retail-consulting firm, said Albertson’s adding Bristol Farms would help both companies.
“It’s a nice operation that appeals to the higher-educated and upper-income customers,” he said.
Beckstead agreed that the relationship with Bristol Farms would benefit Albertson’s.
“I think there are always things we can learn from the different operators,” he said. “They will operate autonomously, and I’m sure we will try to glean as much as we can about the quality that they’re known for.”