Is anyone else keeping up with all the supermarket speculation surrounding Randalls, which operates stores in Galveston and League City?

Ever since 1999, when Calif.-based Safeway paid $1.43 billion for Randalls, then a 116-store chain, rumors have surfaced now and then about a possible sale. 

But all was fairly quiet until October, when Safeway Inc., which operates 1,046 stores, including Randalls, said third-quarter earnings fell 58 percent and the supermarket chain announced plans to check out of the Chicago market, where it operated 72 Dominick’s stores.

That move came after Safeway said in June it would sell its Canadian stores.

Safeway for the third quarter reported a profit of $65.8 million, or 27 cents a share, down from $157 million, or 66 cents a share, a year earlier. Safeway said its net income was hurt by a software impairment charge, higher theft and lower property gains. 

Robert Edwards, president and CEO of Safeway, told the Daily Herald that exiting the Chicago market would allow the company to grow its sales and profitability in core markets.

Edwards also said the Chicago market, relative to other markets, was quite "fragmented and diverse, with independent competitors and an influx of new companies competing there." 

Analysts observed that Dominick's cost structure was much higher than competitors because of a strong employee union.

The move to shed a chain in a tough market made observers wonder about Texas, where competition also is fierce and fragmented.

Randalls had already raised eyebrows in Houston earlier this year when it said it would shut down its South Voss location — in prime grocery store territory — because of “an expired lease and an unsuccessful effort to reach landlord agreement on a new store.”

Meanwhile, an Oct. 24 article by CultureMap Austin raised questions about whether Safeway would sell its 110 Randalls and Tom Thumb stores in Texas

Grocery industry consultant David Livingston told CultureMap Austin he predicted that a sale of Safeway’s Randalls and Tom Thumb stores was “very likely” and would happen “very soon.”

I grew up in Houston and have always had a fondness for Randalls.

The formerly family-run company changed that city’s grocery scene by introducing the Flagship concept, upping the ante with in-store bakeries, delis, floral and coffee shops, pharmacies and more. But competitors such as H-E-B and Walmart, Target and dollar stores came along, changing the way we shop for groceries.

In a call with investors in October, Edwards said "strong store base, brand positioning and sales momentum, built from recent retail and loyalty initiatives," would help the company become more profitable, according to reports.

Late this afternoon, I reached out to Randalls for a comment about the possibility of a sale. I will add any response to this blog when I receive it.

In the meantime, do you care to weigh in on Safeway’s next move? Are you a Randalls shopper?  

(15) comments

TikiOwl

I was a regular Randall's customer until the Safeway purchase. I basically shop at Krogers but have of late done a little shopping at Randall's and noticed that their business on 61st Street was actually a bit better. One thing that drove me to Kroger's was that Boar's Head switched their local outlet to Krogers.

Kristen E
Kristen Carlson

yeah I really like Randalls for great produce and easy access (Kroger is a nightmare for parking and getting in and out). the only thing that would be better would be an HEB!

Steve Fouga

Nearly all my local grocery shopping is at Randall's. This is mainly because Randall's appears cleaner and nicer. Kroger and Randall's each have their advantages, but 9 times out of 10 we choose Randall's.

Centerpointe Moderator

The question as asked is six of one and a half dozen of the other. You know the League City lament by now: We want a Whole Foods or equivalent. There are now 4,400 people watching the "We Want A Whole Foods in Clear Lake" (WWAWFICL) FB group. The numbers continue to grow.

Food is the only consumer commodity for which we don't have a price point choice here.

You can buy a luxury car or an econo-box, depending on your means and priorities.

You can buy a very well-priced starter home or you can buy a McMansion 4+ times the cost of entry level, and there are plenty of those (WWAWFICL recently pointed out that 3 of greater Houston's top 25 wealthiest zip codes are in Clear Lake, so there's no economic argument to be made against the support of higher-end retail here).

You can buy jewelry at Walmart or from a brick-and-mortar diamond merchant where prices boggle the mind.

But if it's food you need, your current choice is between low-end and low-end. I don't understand it.

Frank Emmite

YES or a Central Market

sverige1
Lars Faltskog

Randalls has always been too pricey and located in the hoity-toity parts of town (esp. in Houston). As for the island, nothing beats Krogers on the Seawall. Couple the Seawall location with their name-brands, Kroger wins, Randalls loses.

As for HEB, I'm still in the camp of the island's "silent boycott". Again, in the ritzy parts of Houston, I can drive in the southwest part of town on side streets and pass 3 to 4 different HEB locations there. Why there isn't one back on the island from Ike, I'll never know.

Raymond Lewis

Randall's is closer to me than Kroger's on the island but I prefer Kroger. When I do shop at Randall's, it usually is due to being in a rush (you can get in and out 'cause no one is there). While there, I always wonder why anyone shops there. They are always out of something due to slow restocking. The big thing for me is Kroger has better gas prices with their card. Randall's has decent gas prices IF you pay with cash or a debit card, which is not always convenient.

Frank Emmite

I am not a Randall's shopper.

jmkieslich
James Kieslich

I hope they don't sell away the store here. Really enjoy shopping there. Customer service is great and quality of their meats and deli products is the best on the island.

Barb Falkenhagen

I shop at Kroger, but will shop at Randall's, but only if it is one or two items. It is easy in, easy out, but the product selection is limited and a bit pricey.

Rich Gray

We live out of state where Safeway has a strong presence. Randall's is one of the reasons why we feel at home when we vacation in Galveston. Our Safeway card is accepted there as well. So of course we hope things remain status quo.

lawrance mcafee

The Randall's in Galveston is quite nice. The one on Voss in Houston had really gone bad with competition including a Kroger, Whole Foods and Joe's within 2 blocks.

rah

When Randall Onstead sold his company sold his company he made the big mistake of allowing Safeway to keep the name. When the Onstead's had the store the policy was the customer was always right. They had better products and they were not as pricey as they are now. The come off as an upscale grocery store but, they do not have the products behing them. They used to be the ones to carry Boar's Head not Krogers. Also a friend of mine told me that their back room was the cleanest of all stores. When Safeway took over that was no longer the case. Safeway was here a long time ago in the Odyssey Building. Being clean was not their way of life. When they did sell to Safeway that was when I switched to Krogers....and so it everyone else. Personally, I wish that they would leave the island so we could get an HEB like Bay Colonty or a small Central Market.

Steve Fouga

Well, I like the Randall's store, but only by comparison to the Krogers on Seawall. I prefer Randalls for its produce selection, cleanliness, and ease of access. But OF COURSE I would like them to sell if it meant getting a Central Market or even an HEB.

I actually think both Randall's and Kroger do a fine job for tourist-town grocery stores, but neither is as crisp and clean as some of their mainland counterparts. I shop at the Cinco Ranch Kroger and HEB almost as much as I shop on the Island. They're both light-years better than either of the Galveston stores.

isleshire
Curtiss Brown

I really appreciate the way Kroger's came back after the storm. They brought in generators and employees from all over the region just to get back up and running. Those two free sausages they grilled outside not long after the storm were like the best meal I had in ages. Won't forget their effort for Islanders.

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