The second-largest drugstore chain, Walgreens, originally tried to buy all of Rite Aid. The name of the combined company has yet to be determined. Albertsons currently is owned by an investment group led by Cerberus Capital Management. Albertsons and Rite Aid said that their deal remains subject to approval by regulators and Rite Aid shareholders, and that it is expected to be completed in the second half of this year.
Indeed, Albertsons and Rite Aid each reported that same-store sales — that is, sales at stores open at least a year — were down in their fiscal third quarters, which ended in early December. Albertsons could do that by integrating Rite Aid into its network of stores, said William Conaboy Jr.
Twitter: PeltzLATimes. James F. Peltz covered nearly every aspect of national business news — including corporate America, Wall Street and global economic matters — for more than 30 years in Los Angeles and New York.
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By the Vons Grocery Company numbered 87 stores. Von der Ahe had the foresight to sell his stores to McMarr Stores in , before the stock market crash decimated the value of commercial properties. McMarr would in turn eventually be purchased by Safeway. In the meantime, Von der Ahe enjoyed three years of retirement before being lured back into the grocery business by his sons Ted and Wil, who decided to open a new chain of Vons stores in the Los Angeles area.
Von der Ahe helped his sons out with investment capital and industry expertise, and Vons stores began to multiply. The partnership culminated in the opening of a 50,square-foot food market in downtown Los Angeles in The prototype of the supermarket, this location boasted a number of innovative features which today are taken for granted, notably self-service produce, meat, and delicatessen departments.
The store confirmed the Von der Ahe family's role as innovators in the retail food industry. In Vons merged with Shopping Bag Food Stores, bringing the total number of stores under family management to Particular emphasis was placed on understanding local markets and arranging shelf space accordingly, a practice that has continued to the present day. In the merger was challenged by the Federal Trade Commission.
The case went all the way to the U. Supreme Court, which ordered Vons to divest itself of the Shopping Bag locations immediately. In Vons was bought out by the Household Finance Corporation, later Household International, which added the chain to its Household Merchandising division. The expansion of Vons Stores into the San Diego area during the s corresponded with a period of dynamic growth when the chain widened operations to include wholesale marketing to other retailers and fast-food chains.
In the mids, Vons opened a series of mid-sized units called Value Centers, which sold food and drugs in one location. This "combo" concept would develop into Pavilions Stores in In the early s, Vons expanded north into the Fresno area. In the same period, the company began to stress the importance of combining coupon promotions with in-store product demonstrations as a means of persuading more conservative customers to try new foods.
Vons was among the first stores to operate its product promotion department as a profit center funded by fees from participating companies. Vons scored a tremendous coup in when the company was designated the official supermarket of the Los Angeles Olympics.
Under a deal worked out with the Olympic Committee, the chain agreed to provide food for more than 12, athletes, coaches, and trainers in the Olympic Village. In return, Vons was guaranteed a number of exclusive merchandising and advertising opportunities. Store decor was changed to highlight the Olympic theme, and the Olympic logo was placed on a number of perishable items that were considered to have particular nutritional value.
The deal, which was the largest retail buyout in the United States at the time, was masterminded by Roger E. Stangeland, who went on to become chairperson of the newly independent Vons Companies. Stangeland had been an executive at Household International since , and had been responsible for Vons Stores since While the buyout successfully separated Vons from Household International, it also burdened the company with an unacceptable level of debt. Stangeland announced that reducing the debt-to-equity ratio would be a priority over the next few years.
In the meantime, he added the ten-store Pantry chain to the Vons portfolio. He also charged William S. Davila, the company's president, with developing an expanded "combination store" concept. Started in , the year of the leveraged buyout, the Pavilions subchain would number 28 stores by At 75, square feet, the first Pavilions store was the company's largest to date. A combination store, Pavilions offered huge food and nonfood sections. Different departments were identified with banners and decked with white awnings which created the effect of tented "pavilions.
The store carried a greater selection of produce than comparable stores, and shoppers were invited to sample new products at a permanently staffed demonstration booth.
In order to emphasize the freshness of the perishable goods, all food preparation was done in full view of the shopping public. At the same time, the nonfood area stressed value for money, with a large variety of health and beauty aids offered at discounts of up to 30 percent on average retail prices, and a professionally staffed pharmacy selling prescription drugs at discounts of up to 50 percent.
In some areas, Pavilions competed directly with adjacent Vons stores, a situation that traditional marketing strategists would tend to avoid. Vons executives remained unruffled, however, articulating their belief that if Pavilions did not go head-to-head with the older stores, a competitor certainly would. The goal of the merger was to take Vons public while controlling the company's debt load.
Davila was named president and COO. Since Vons had no ambitions to expand to the Midwest, Allied's Detroit assets were sold to members of the existing management.
Constantly in search of new merchandising techniques, Vons executives turned their attention to the ethnic composition of their customers in They observed that by an estimated 40 percent of southern California's population would be of Hispanic origin.
In January the company opened its first Tianguis superstore in Montebello, California, designed to cater to the specific needs of Hispanic customers, especially first-generation immigrants. Tianguis, meaning marketplace in Aztec, denotes the place where the community met to shop and to socialize; commenting on the choice of name, CEO Stangeland said in August that Vons hoped to "position our stores as an important center in the community" and to "differentiate ourselves strongly from the competition.
Tianguis differed from its predecessors in many ways.
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