Adding Tom Thumb will give Albertsons renewed power in local grocery market

Posted Sunday, Mar. 09, 2014  comments  Print Reprints
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Bringing Albertsons and Tom Thumb together under one corporate parent should strengthen their position in the hyper-competitive North Texas grocery market. But will we lose some stores?

Officials with Albertsons, controlled by the Cerberus Capital Management private equity company, said they don’t intend to close stores after merging with California-based Safeway, which operates 1,300 stores in several states under several names including Tom Thumb. But the $9 billion deal must pass scrutiny from federal regulators.

After our deadline passed Thursday, when the deal was announced, Albertsons spokesperson Christine Wilcox replied to our query on how North Texas will be affected.

“Combining Albertsons and Safeway will make the marketplace more competitive, not less competitive, whether viewed on a national or local basis,” Wilcox said. “Given this merger will enable us to reduce prices, we believe it will enhance competition and benefit customers.”

One local retail analyst said the move by Albertsons to join up with Safeway makes good business sense.

“I’m not surprised at this development given the hyper-competitive grocery market,” said Dwight Hill of Plano-based The Retail Advisory. “This merger will create an approximate 2,400-store chain under 16 different banners.”

But Hill is less sure that executives will stick by their assertion Thursday that no stores are slated for closing under the plan.

“While they say no stores will be closed, there will likely be some under-performing locations either shuttered or sold,” he told us. “I don’t expect the Tom Thumb banner to disappear given its tremendous brand equity here in Texas.”

Overall, the merger should create a great deal of value in terms of buying power and efficiency, which the combined firm should then reinvest by lowering prices or generating promotions that benefit the customer, Hill went on.

As for the Metroplex, a marketplace hotly contested by Walmart, Target, Kroger and numerous others, “Tom Thumb and Albertson’s are most certainly stronger in combination than apart,” he added.

More than a decade ago, before Walmart’s big push into groceries, Albertsons was the market leader in North Texas with more than 100 stores. It cut back significantly after the company was sold in parts to Cerberus and SuperValu in 2006. About a year ago, Cerberus paid $3.3 billion to buy 870 Albertsons, Acme, Jewel-Osco and Star-Market stores from SuperValu, consolidating the Albertsons brand under its wing.

Historic building in Stockyards is sold

The historic Cody Building in the Fort Worth Stockyards has traded hands.

Jay Hester, a co-owner in the Stockyard Saloon, and Sam Gibbins last week bought the building at 221 W. Exchange Blvd. from a Burleson-based partnership led by Louis Muzyka. That group, Cody Building, Llc., had owned the three-story, 20,000-square-foot building since 1999, records show.

Hester said the building was fully leased at the time of the sale, with an entertainment venue on the first floor and office space on the other two.

The building was built in 1908 by Bill Cody. Hester also co-owns the Stockyard Saloon building at 2405 N. Main St.

Frank Kent Cadillac wins GM honor

For the second straight year, Frank Kent Cadillac in Fort Worth has received Dealer of the Year honors from General Motors Corp. for performance.

Will Churchill and Corrie Watson, brother and sister, own and operate Frank Kent Motor Co.

“Words cannot express how honored we are to work with such a great team,” Churchill said. “It’s humbling to see how our hard work and dedication has paid off.”

Only a small percentage of GM dealers receive the award, which is based on sales, growth, innovation and customer satisfaction.

The late Frank Kent started Frank Kent Motor Co. in 1935. Churchill and Watson are Kent’s great-grandchildren.

Sandra Baker, 817-390-7727 Twitter: @SandraBakerFWST Jim Fuquay, 817-390-7552 Twitter: @jimfuquay Barry Shlachter, 817-390-7718 Twitter: @bshlachter

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