Albertsons Companies, Inc. is an American grocery company founded and headquartered in Boise, Idaho. It is privately owned and operated by investors, including Cerberus Capital Management.
With 2,260 stores as of the third quarter of fiscal 2019 and 267,000 employees as of fiscal 2018, the company is the second-largest supermarket chain in North America after Kroger, which has 2,758 stores. Albertsons ranked 53rd in the 2018 Fortune 500 list of the largest United States corporations by total revenue. Prior to its January 2015 merger with Safeway Inc.
for $9.2 billion, it had 1,075 supermarkets located in 29 U.S. states under 12 different banners. Its predecessor company, Albertsons, Inc., was reorganized as Albertsons LLC and sold to AB Acquisition LLC (a Cerberus Capital Management-led consortium).
After buying back the majority of its former stores it sold to SuperValu in 2006, AB Acquisition announced it would change its name to Albertsons Companies Inc. in 2015.The company’s corporate name was Albertson’s until 2002, when the apostrophe was removed.
Albertsons was founded by Joe Albertson on July 21, 1939, in Boise, Idaho. An ad in the Idaho Statesman newspaper touted Joe Albertson’s first store as “Idaho’s largest and finest food store.” The store was filled with perks that, at the time, were brand new: free parking, a money-back guarantee, and even an ice cream shop. The original store was built onto several times, but it was demolished in 1979 and a replacement store built on the same property. A brick monument stands on the northwest corner of 16th and State Streets in downtown Boise, commemorating the original store.
The cheese department of an Albertsons in Seattle (1955)
Joe Albertson’s grocery store was an enormous success, and he reinvested his profits back into the business. New stores were opened in neighboring towns to the west, Nampa, Caldwell, and Emmett, before Pearl Harbor in late 1941. The company grew steadily in the years following World War II. When Albertson was considering putting a new store in a town, he would drive around the town and look for neighborhoods with lots of children’s clothing hanging on clotheslines; he knew that those kinds of neighborhoods were where he wanted to build his stores.
Albertsons, Inc. became a public company in 1959, and its growth continued, opening its 100th store in Seattle in 1964. In 1966, Albertsons expanded to southern California by acquiring Greater All American Markets, a small chain in Orange County.
Partnering with Skaggs
In 1969, Albertsons partnered with Skaggs Drug Centers, owned by The Skaggs Companies, Inc., to create the first combination food/drug stores, first in Texas. The partnership was a tremendous success for several years. The partnership ended due to the fact that it was getting more difficult to control. Neither partner could buy each other out, and the partnership was dissolved amicably in 1977. Skaggs kept stores in Texas, Oklahoma, and Arkansas, and Albertsons kept stores in Florida, Alabama, and Louisiana, as well as some Texas stores (based in San Antonio).
Albertsons continued to expand its base in the West during this time, buying Fazio’s-Shopping Bag in 1972 from Fisher Foods, adding 46 stores to the Los Angeles area. In 1974, Albertson’s bought the 4-store Monte Mart chain in northern California.
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In 1982, Albertsons reorganized its management into four regions: California, Northwest, Intermountain, and South. The South stores included stores in Texas, Alabama, Louisiana, and Florida, as there were no stores between Louisiana and Florida.
Albertsons continued to add stores in the 1980s, building or acquiring about 283 stores during the decade. Albertsons continued to expand in Texas beyond the Skaggs base in north Texas and San Antonio, entering the Dallas-Fort Worth market in 1984, and adding three Skaggs-Alpha Beta stores in Austin within months after entering that market in early 1989 with the acquisition of six Tom Thumb stores.
Expansion in the 1990s
Albertsons began to expand heavily in the 1990s.In 1992, Albertsons bought the stores American Stores (formerly Skaggs Drugs Cos.) had in Texas, Oklahoma, Arkansas, and Florida. Many of the stores had been opened as Skaggs Albertsons originally (later turning into “Skaggs Alpha Beta” under American Stores ownership) but by 1991 had been rebranded as Jewel-Osco. These included a few stores that American Stores opened in the late 1980s under that name in Florida. Additionally, a non-food distributions center in Ponca City, Oklahoma, was purchased from ASC.
The Skaggs acquisition was a success, and the new stores were integrated into Albertsons’ Southern division. The ease of that acquisition and Albertsons’ high-flying stock price led Albertsons to attempt expansion on a grand scale. In a series of acquisitions in the late 1990s, Albertsons purchased Seessel’s and 14 other stores from Bruno’s,Buttrey Food & Drug (divesting seven Buttrey stores and six Albertsons stores to Smith’s and another two Buttrey stores to SuperValu), the Springfield, Missouri Smitty’s chain, and three Super One Foods stores from Miner’s Inc. in the Des Moines market, all while building new stores across all divisions. These acquisitions brought Albertsons into five new states: Georgia, Iowa, Missouri, North Dakota, and Tennessee.
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A typical Albertsons in Boise, Idaho, in June 2007
In 1999, Albertsons made its biggest acquisition yet: American Stores Company, which included the chains ACME in Pennsylvania, New Jersey, Maryland, and Delaware; Lucky in California and Nevada; Jewel, Jewel-Osco in Illinois, Indiana, and Iowa, and two drug store chains: Osco Drug and Sav-on Drugs.
The acquisition briefly made Albertsons the largest American food and drug operator, with over 2,500 stores (including stand-alone drug stores) in 37 states, until Kroger’s acquisition of Fred Meyer closed the following month. To make the acquisition, Albertsons was forced by anti-trust concerns to sell 146 stores, primarily in California, Nevada, and New Mexico.
In southern California, there were already Albertsons, so in order to not have two banners in the same area, Lucky stores were converted to the Albertsons banner in November 1999, and the Lucky brand name was retired.
In January 2001, Albertsons restructured its “districts” to a divisional structure mostly based around distribution centers, with a drug store division and 18 regional division offices.