Albertsons closes stores

0 Comments | Oakland Tribune, Jun 7, 2006 | by Eve Mitchell

Some 31 Albertsons grocery stores in the Bay Area are facing a shelf-life expiration date -- they will be closed by early August by the stores' new owner in a move to make its Northern California division more profitable.

It's possible the closures will result in layoffs, an Albertsons spokeswoman said Tuesday. But just who will get pink slips will have to wait until workers at the closing stores who have seniority exercise bumping rights that allow them to move to other stores.

"There will be an impact -- we just don't know what it will be. It's kind of too early to tell," said Quyen Ha, spokeswoman for Albertsons' Northern California division.

Throughout the division, a total of 37 stores identified as underperforming and unprofitable will be shut down, or 22 percent of the division's 168 stores. Eleven stores will close in the East Bay, while two stores will close in San Mateo County and six will close in Contra Costa County. The majority of the closings are slated for Santa Clara County.

"Concentrating our resources on a base of solidly performing stores will allow Albertsons to be more competitive and better serve the community," Donna Robbins, president of Albertsons' Northern California division, said in a statement.

The announcement came just a few days after Albertsons was sold off in a $9.8 billion deal. Supervalu acquired the bulk of the stores. But Albertsons' Northern California division, along with groups of stores in Dallas, Florida, the Rocky Mountains and the Southwest, was sold to a group led by Cerberus Capital Management L.P. On Tuesday, Cerberus said it was closing some Albertsons stores in its other regions as well.The 31 local closures will leave about 70 Albertsons stores operating in the Bay Area, including 25 in Alameda County, eight in San Mateo County and 12 in Contra Costa County, Ha said.

The Northern California division has about 14,000 employees, said Ha, who did not have a Bay Area breakdown. Typically, about 50 to 60 people work at an Albertsons store, although that number can vary depending on the store size, she said.

The Bay Area stores selected for closure were not a surprise, according to Richard Benson, president of Local 870 of the United Food and Commercial Workers union, which represents Albertsons workers in Alameda County.

"This was not unexpected. (Cerberus) had indicated ... they would be looking at stores that by their definition were not performing," he said. "What we hope is the new company will see the need to increase the staff of all the stores to better serve their clients, which quite frankly has not been done" in the past before the division was sold, he said.

"There will be consolidation and some people may go to work at different stores. But people feel very badly about it because some may lose their jobs," said Phil Tucker, manager of special projects for UFCW local 1179, which represents Albertsons workers in Contra Costa County.

The 31 stores in the Bay Area slated for closure "have been dogs for a while. ... They've been underperforming," said Mark Husson, a retail analyst at HSBC Securities. "Some stores have been deprived of capital for a while and are looking very tired."

A move by Pleasanton-based grocer Safeway Inc. to upgrade and remodel its stores in the last few years has hurt sales at Albertsons, Husson said.

It's possible Cerberus might look for a new buyer -- possibly even Safeway -- for the stores that are not set to close, he said.

"I don't think the Albertsons name will last forever," said Husson, adding the brand never really caught on locally after the old Albertsons acquired the Lucky supermarket chain in 1998.

Ha, the Albertsons spokeswoman, said the company owns some of the locations slated for closure and leases others.

"We're going to market the (company-owned) properties with the intent of bringing in new tenants for each of these properties. It could be retail, it could be anything," she said.

Several officers of the UFCW locals plan to meet with Albertsons area executives next week to learn what may be the fate of their workers and what options to layoffs might exist.

Mike Borstel, president of UFCW Local 101, which represents workers in San Mateo County, said he hopes the union employees in these stores can be hired at other Albertsons stores.

"They have stores in Redwood City and San Bruno that are both good-size stores, and another one in San Carlos," he said. "So there are more options here to put folks into other jobs."

When the local presidents meet with Albertsons executives next week, Borstel said, his goal will be to place as many members into other jobs as possible and to make sure that "any layoffs follow the letter of the contract," which requires that seniority determine who gets to keep their jobs.

Business Writer Eve Mitchell can be reached at (510) 208-6474 or emitchell@angnewspapers.com.

These Albertson's are among the 31 Bay Area stores closing in August:

Alameda County

Oakland, College Ave. Newark Hayward, 31049 Mission Blvd. Fremont, 46547 Mission Blvd. Fremont, Stevenson Blvd.