Albertsons LLC Sees Synergies from New Mexico Raley's

ELLIOT ZWIEBACH

ALBUQUERQUE, N.M. — Albertsons LLC anticipates distribution, procurement and advertising synergies in its New Mexico operating area following completion of its acquisition of 10 Raley's locations in the state.

Prior to the acquisition, Albertsons had 21 stores in New Mexico. One of the 10 stores it acquired was already closed, and it closed two more after the acquisition, for a net gain of seven.

“Raley's was doing very well there, and we plan to build on that,” said Bob Colgrove, president of the Southwest division, Albertsons LLC, in an interview with SN.

In a separate development, Affiliated Foods, Amarillo, Texas, said it has entered into a distribution agreement with Albertsons LLC to supply a variety of items to the seven stores. Affiliated had been supplying items to those stores since late 2001.

Albertsons LLC reopened the seven locations — six here and one in Taos, a new market for Albertsons — under its own banner with the slogan “It's a Good Move” in print ads, radio and billboards.

Raley's had operated in New Mexico since 1999, but with the rest of its stores in Northern California and Northern Nevada, it opted to sell the stores here to focus its energies in its core markets, the company said in early June when it announced the sale to Albertsons.

Colgrove said the addition of seven more stores in the state should enable the chain to improve its market share; gain synergies in distribution, procurement and advertising; and offer more personal-growth opportunities for employees.

He said the company plans to do a major remodel at the Taos store within four to six months. “It's a very old store that's been shopped hard through the years, and while the Albuquerque stores are all relatively new or recently remodeled, the Taos store is in need of refreshing.”

Since mid-2006, when Albertsons LLC took over the 21 New Mexico stores operated by the original Albertsons, the company has seen ongoing improvements in average store volume, market-basket size and customer counts, Colgrove said.

“We've gained traction with consumers by cleaning up the stores; turning the lights back on, literally; putting out products customers want; switching to Choice beef; and adding the ‘3's a Crowd’ service program,” in which additional registers are opened if three or more people are on any one line.

Following the lead of the chain's Rocky Mountain division, Albertsons' Southwest division dropped the Albertsons Preferred Customer Card in mid-June, “and we've had a lot of positive comments from customers since then, thanking us for needing one less plastic card in their wallet or for making it easier to enjoy savings without requiring a card,” he said.