MODESTO, Calif. — Save Mart Stores here is converting six to eight Albertsons a week to its banner while it considers whether to introduce a new banner for the 75 stores it acquired in San Francisco, Bob Piccinini, chairman and chief executive officer, told SN last week.
“San Francisco is a different market from other parts of our operating areas, with a higher cost structure that requires different pricing,” he explained.
“We operate Save Mart stores in San Jose with different pricing from the rest of the chain, and it creates complications, so we're still playing with the idea of developing a new name to use when we convert the San Francisco Albertsons stores.”
The company will probably not begin converting those stores until late summer or early fall, he noted.
As it converts stores, Save Mart isn't anticipating any sudden sales shifts, Piccinini said. “It took Albertsons seven years to run those stores down, and we don't expect to get it all back in the first six months. We'll have to earn it. You grow a business very gradually, a little bit at a time, and it could take two or three or four years to achieve good sales gains.”
Save Mart acquired 130 stores from Albertsons late last year (three of which have been closed) and began the process of converting them in mid-May, with 22 stores scheduled to be carrying the Save Mart banner by the end of last week.
Of the stores converted so far, eight are in the South San Joaquin Valley, encompassing Fresno and several other, smaller cities — areas where Save Mart already operates — “so we're not seeing much change, because people aren't going to change stores in that kind of situation,” Piccinini said.
The company converted seven of the 24 Albertsons locations in the Sacramento market two weeks ago and was scheduled to open seven more last week. Because Save Mart does not operate conventional supermarkets in that region, “we're waiting to see if those stores get a lift as we offer an alternative to Safeway, Raley's or Bel-Air,” he said.
After Sacramento, Save Mart will move the conversion process eastward, tackling 10 stores in Nevada and two on the California-Nevada border, then south to eight stores in the central coastal region of the state before the effort gets to the Bay Area, Piccinini pointed out.