Save Mart acquisition brings heat to competition - The Packer

Save Mart acquisition brings heat to competition

11/28/2006 12:00:00 AM
Jim Offner

(Nov. 28) Albertsons LLC is parceling out more of the property it acquired in last summer’s buyout of retail chain Albertson’s Inc., and this time, the beneficiary is regional player Save Mart Supermarkets.

Modesto, Calif.-based Save Mart, which has operated 124 stores in parts of Northern California and Nevada, said Nov. 27 it had reached an agreement to buy the Northern California division of Albertsons LLC, the piece of Boise-based Albertson’s Inc. purchased last June by Cerberus Capital Management.

Albertsons LLC’s Northern California business has 132 stores in several key Northern California markets, including San Francisco and Sacramento.

“That will bring Save Mart to a different position,” said Ed Odron, president of Stockton, Calif.-based Produce Marketing Consultants. “It puts them in a really good position because they don’t have a real presence in Sacramento. Save Mart has been elevated to a real nice position and gets them into a marketplace where they haven’t been. When you get 25-30 stores, everything falls into place for you.”

It also helps Save Mart compete more strongly in the Bay Area, where Pleasanton, Calif.-based Safeway Inc. and Sacramento-based Raley’s Supermarkets have dominated, Odron said.

Save Mart did not disclose any financial details of the deal, which the company said will close in February.

The purchase includes Albertsons warehouse facilities in Roseville and Vacaville, Calif., and an office complex in Dublin, Calif.

“Most importantly for Save Mart, it makes them more of a player sort of closer into the city,” said Neil Stern, a senior partner at Chicago retail consultant McMillan/Doolittle LLP. “It gives them a lot more locations and a lot more presence and sets them up as the No. 2 player to Safeway in that market. It’s a major move for them.”

Save Mart operates 75 stores currently under the corporate banner along a corridor in the San Joaquin Valley from the San Jose area south to Bakersfield. The company also operates 44 price-impact Food Maxx stores in the Central Valley and five S-Mart stores in Lodi and Stockton.

The new company will have more than 20,000 employees.

Save Mart officials did not return telephone calls for comment Nov. 28.



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