American Stores

### Key People

Jim Donald (Co-Chairman)Leonard Laufer (Co-Chairman)B. Kevin Turner (Vice Chairman)Vivek Sankaran (President & CEO)

### Products

Bakery, dairy, deli, frozen foods, general grocery, meat, pharmacy, photo, produce, seafood, snacks, liquor

### Subsidiaries

Acme Markets, Haggen, Jewel-Osco, Lucky, Pavilions, Plated, Randalls, Safeway Inc., Shaw's and Star Market, SuperValu, Tom Thumb, United Supermarkets, Vons

**American Stores Company** is an American public corporation and a holding company which ran chains of supermarkets and drugstores in the United States from 1917 through 1999. The company was incorporated in 1917 when The Acme Tea Company merged with four small Philadelphia-area grocery stores *(Childs, George Dunlap, Bell Company,* and *A House That Quality Built)* to form American Stores. In the following eight decades, the company would expand to 1,575 food and drugstores in 38 states with $20 billion in annual sales in 1998. The company was acquired by Albertsons (with the latter taking the company name) in 1999, later acquiring Safeway in 2016, and SuperValu in 2018.

## History

By 1925, American Stores had grown from 5 supermarkets in 1917 to nearly 1,800 stores. In 1946, a proposed acquisition of *Grand Union* supermarkets was turned down by Grand Union stockholders.

### 1960s-1970s

In 1961 American Stores company acquired California's Alpha Beta chain of supermarkets. In the 1970s, in order to compete with lower priced grocery retailers such as ShopRite and Pathmark (competitors which did not offer trading stamps), Acme Markets launched its Super Saver discount grocery chain in Pennsylvania.

American Stores itself was acquired in 1979 by the Skaggs Companies, Inc., which adopted the American Stores Company name, and relocated the company headquarters to Salt Lake City, Utah.

American Stores was by far the larger organization, with 758 supermarkets, 139 drugstores, 53 restaurants, and 9 general merchandise stores in nine states when compared to the 241 *Skaggs* stores. Although the resulting entity bore the American Stores Company name, it was controlled by Skaggs management headed by Leonard S. Skaggs Jr. more familiarly known as Sam Skaggs. Stores in several markets having both an Alpha Beta supermarket and a Skaggs Drug Center drugstore presence were combined (or expanded) to combination food and drug stores and re-branded *Skaggs Alpha Beta*.

* In 1977, the Skaggs Companies, Inc. had amicably dissolved a partnership started in 1969 with the Albertsons supermarket chain which pioneered the first combination grocery/drug with stores named *Skaggs Albertsons*.

### 1980s

American Stores posted $83 million in earnings on sales of nearly $8 billion in 1983. But its presence was still weak in the midwest, New England, and Florida. To help overcome these remaining geographical shortcomings, Sam Skaggs made another attempt to merge with the Jewel Companies, Inc. in 1984.

* In 1978 Skaggs Companies, Inc., originally had worked out an agreement to merge with Jewel Companies Inc., but the merger was torpedoed at the last minute when some of Skaggs's directors, concerned that they would lose their autonomy under the deal, failed to approve it.

#### Acquisition of the Jewel Companies

The Jewel Companies, Inc. chairman Weston Christopherson was opposed to a merger and Sam Skaggs was forced to engineer a hostile takeover. On June 1, 1984, American Stores tendered an offer worth $1.1 billion for 67 percent of Jewel's outstanding shares at $70 per share.

For two weeks, the Jewel Companies, Inc. management refused all comment on the offer, maintaining its silence even at a stormy shareholder's meeting before which Jewel shareholder groups controlling 20 percent of the company's stock had come out in favor of negotiating with American Stores. Finally, on June 14, Sam Skaggs and Jewel president Richard Cline reached an agreement after an all-night bargaining session. American Stores raised its bid for Jewel's preferred stock, increasing the total bid to $1.15 billion in cash and securities. In return, Jewel dropped plans for a defensive acquisition of *Household International Inc*. and accepted American Stores' offer. To help raise cash for the deal, American Stores sold its *Rea and Derick, Inc.* subsidiary comprising 134 drugstores in December 1984 to People's Drug, a division of *Imasco Limited*. 33 Alpha Beta grocery stores in Arizona sold to ABCO Foods, 22 Alpha Beta grocery stores and support facilities in northern California were also sold.

The acquisition of the Jewel Companies, Inc. consisted of the Illinois-based Jewel Food Stores supermarket chain, Illinois-based Osco Drug, Inc., Massachusetts-based Star Market, California-based Sav-on Drugs, Montana-based Buttrey Food Stores, and White Hen. This acquisition also returned L. L. Skaggs's Osco Drug chain to the Skaggs family ownership. And Sav-on Drugs, another Jewel Companies subsidiary, had been founded by C.J. Call, who had once been a business partner of another of Sam Skaggs's uncles, O.P. Skaggs.

This merger added 193 supermarkets, 358 drugstores, 140 combination food and drug stores, 301 convenience stores, and 132 discount stores to American Stores' holdings. But in 1985, the company found itself in legal trouble through its new subsidiary. A salmonella food-poisoning outbreak affecting some 20,000 people in the midwest was traced to Jewel's *Hillfarm Dairy* that had supplied tainted milk to Jewel stores in March and April 1985. In 1987, Jewel was found not liable for punitive damages in *Illinois Cook County Circuit Court* but agreed to pay compensatory damages estimated at $35 to $40 million.

In 1985 American Stores sold the White Hen chain, since convenience stores did not fit into the company's plans. Buttrey Food & Drug and Star Market were put up for sale in order to raise capital and pay down debt. Although the company continued to operate these subsidiaries, investment in remodeling and new construction for these stores and for Acme Markets was minimal throughout the 1980s.

By 1987 American Stores Company was the largest drug retailer in the United States, but only the third-largest grocery retailer and underperforming its peers. In October 1987, the company exited the Idaho and Washington drugstore markets with the sale of 25 Osco Drug units to Pay Less Drug Stores.

#### Acquisition of Lucky Stores

In March 1988, American Stores made an unsolicited tender offer for Lucky Stores, an Alpha Beta competitor noted for high efficiency and low prices. American Stores’ Alpha Beta chain in California was struggling, plagued by high prices and a reputation for poor service. At the time, Lucky was California's leading grocery retailer, due in part that it was the only chain with a significant presence in both northern California and southern California. Lucky refused American Stores' first offer. Within a month, American Stores proposed to up its bid if Lucky would agree to a friendly takeover. Again Lucky management rejected the offer as inadequate and was said to be contemplating defensive strategies. Later, American Stores upped its bid to $2.5 billion, or $65 per share. Lucky accepted and American Stores was on track to become the largest supermarket chain in the United States, over the Kroger and Safeway chains.

The acquisition included then Dublin, California-based Lucky Stores, with stores in California, Nevada, and Arizona; Tampa-based Kash n' Karry, with stores in Florida; and a minority interest in Milan, Illinois-based Eagle Food Centers.

In August 1988, California Attorney General John Van de Kamp asked the Federal Trade Commission to void the sale, claiming that a Lucky-Alpha Beta juggernaut would cost California consumers $400 million by reducing competition. The Federal Trade Commission refused but did force the divestiture of 37 Alpha Beta stores, which were sold in December 1988, the same month 38 Lucky stores in Arizona were also sold. Van de Kamp then initiated a lawsuit against American Stores under the Clayton Antitrust Act, and on September 1988, a federal judge in Los Angeles issued a preliminary injunction against the merger. American Stores appealed, and in April 1989, a Ninth Circuit panel in San Francisco overturned the injunction. Van de Kamp appealed this reversal to the U.S. Supreme Court. Meanwhile, American Stores continued to plan its integration of Lucky while it waited for the district court to lift the injunction as ordered by the Ninth Circuit.

However, on August 22, 1989, Associate Justice Sandra Day O'Connor, in her capacity as Circuit Justice for the Ninth Circuit, issued an interlocutory order staying the Ninth Circuit's issuance of its mandate back to the district court, which kept the preliminary injunction in place while the parties briefed the issues before the high court. After oral argument on January 19, the U.S. Supreme Court issued a unanimous decision on April 30, 1990 (although Justice Anthony Kennedy filed a concurring opinion separately from Justice John Paul Stevens' opinion for the Court) in favor of the state of California. The Court ruled that the words "injunctive relief" in Section 16 of the Clayton Act impliedly included the power to force divestiture of assets in order to ameliorate harm to the market from an anticompetitive merger.

Wishing to avoid additional lengthy litigation, the following month American Stores reached an agreement with Van de Kamp whereby the company was allowed to convert 14 Alpha Beta stores to the Lucky name but also had to sell 161 southern California stores (152 Alpha Beta stores and 9 Lucky stores) within 5 years. The deal put no restrictions on American Stores' future growth in California and did not require state approval of the buyer or terms of the sale.

In 1989, Kash n' Karry was acquired by its management from American Stores for $305 million. American Stores also sold the minority interest in Eagle Food Centers that it had acquired from Lucky and sold it to New York-based *Odyssey Partners*.

#### Headquarters move to Southern California

Based on a recommendation by Booz-Allen, American Stores relocated its corporate headquarters from Salt Lake City to Irvine, California, in July 1988. At the time, the company indicated the reason for the move was to place the headquarters in one of the company's major operating market areas and therefore closer to its business interests. However, the corporate headquarters was moved back to Salt Lake City in 1989 with little explanation.

#### Sav-on Name Change

American Stores plans to build a coast-to-coast drugstore chain in the United States were underway. The strategy was to build a nationwide network of pharmacies, streamline operations and advertising in order to gain national recognition for the brand, especially for the high-margin private label products. The name Osco Drug was chosen as the national chain banner because of the large number of stores which already had that name and existed in various parts of the United States. The name change was completed for the *Skaggs* drugstores in 1985 and then for the *Sav-on* stores in 1986. The name 'Osco' did not resonate well with *Sav-on's* southern California customer base. American Stores eventually made the decision to change the name of the former *Sav-on* stores back to Sav-on Drugs. Rumors circulated at the time claiming that the reason for the name change back to 'Sav-on' was due to 'Osco' having the same pronunciation as the Spanish word 'asco' (oss-ko) which means disgust or loathing, a considerable factor within southern California’s heavily Hispanic market. This explanation for the name change was refuted by American Stores. The name change on all stores was completed in 1989 and the Sav-on Drugs brand was re-launched in southern California and Nevada.

#### American Drug Stores, Inc.

In 1989, a new subsidiary *American Drug Stores, Inc.* was formed and consisted of American Stores drugstore holdings of Osco Drug, Sav-on Drugs, the *Osco* side of the Jewel-Osco food-drug combination stores and *RxAmerica*. *RxAmerica* began earlier in 1989 as a mail service prescription fulfillment center with a facility in Salt Lake City.

#### Jewel-Osco Florida

On March 16, 1989, the company opened a 75,000-square-foot *Jewel-Osco* combination store in Largo, Florida. This marked American Stores’ re-entry into the Southeast after an absence of nearly two decades. Mark S. Skaggs, son of Sam Skaggs was president of the new *Jewel-Osco of Florida* division. This was a wholly separate division of the company and was not part of the Jewel Food Stores chain in the midwest or the Osco/American Drug Stores subsidiary. Unlike the combination stores in the midwest, where Jewel ran the food side of the combination stores and Osco ran the drug side, the Florida stores were run by a one overall manager, similar to the way a *Skaggs Alpha Beta* store was managed. Only six *Jewel-Osco* stores were opened in Florida and all were sold to Albertsons in 1992.

### 1990s

In the early 1990s, reducing the $3.4 billion in debt load became the prime challenge for the company; doing so was mainly accomplished through asset sales. By the end of fiscal 1992 long term debt was down from $3.4 billion to $2.1 billion.

#### Divestitures

In the early 1990s, American Stores divestitures included:

* October 1990: 44 Buttrey Food & Drug stores located in Montana, Wyoming, Washington, Idaho, and North Dakota by a management-led $184 million leveraged buyout.
* June 1991: 51 Osco Drug stores in Colorado, Utah, and Wyoming sold to Pay Less Drug Stores, at that time a division of Kmart Corp., for $60 million.
* June 1991: 152 unit Alpha Beta chain sold to the Yucaipa Companies for $251 million.
* October 1991: 74 newly re-branded and remodeled Texas, Oklahoma, Florida, and Arkansas *Jewel-Osco* combination stores for $454 million to Albertsons. Earlier in 1991 and prior to the announcement of the sale, American Stores had remodeled and renamed these stores from *Skaggs Alpha Beta* to *Jewel-Osco*. The 11 *Jewel-Osco* New Mexico stores were retained by American Stores and operated as *Jewel-Osco Southwest, Inc*., a subsidiary separate from the Jewel Food Stores chain in the midwest.
* The company also put its 275 unit ACME Markets chain on the block in early 1991, but shortly thereafter decided not to sell Acme Markets, apparently because the bids received were not deemed sufficient.
* November 1994, the Star Market grocery division, fifth in market share in the Greater Boston area, consisting of 33 food stores in Massachusetts and Rhode Island was sold to *Investcorp Bank*, an international investment bank for $288 million in cash and the assumption of substantially all of its outstanding liabilities. American Stores deemed Star Market expendable because the company wanted to focus on markets where it held first or second place in market share.
* January 1995, the company sold 45 Acme Markets located in New York and northern Pennsylvania to the Penn Traffic Company for $94 million.

#### Acquisitions

At the same time that the company was making major divestments in the early 1990s, American Stores also looked for opportunities to make strategic minor acquisitions, ones that would enhance its position in the main markets where it needed to strengthen market share.

* The company's California drugstore operations were enhanced through the early 1992 $60 million purchase of 85 CVS Stores (63 CVS Pharmacy drugstores and the rights to operate 22 CVS health and beauty aid stores) from the Melville Corporation. These stores converted to the Sav-on Drugs and Sav-on Express banners. Later that year, 30 Thrifty and *Rx Plus* drugstores in Arizona and Nevada were acquired.
* The following year the Midwest region received a boost when *Reliable Drug* (a 55 unit chain) in Indiana, Illinois, Iowa, Kansas, and Missouri was bought. These stores were soon re-bannered as Osco Drug stores.
* February 1995, American Stores spent about $37 million for 17 *Clark Drug* stores in southern California, which were then converted to the Sav-on Drugs name.

#### Transformation into an Operating Company

American Stores had long been run as a decentralized holding company, but in order to compete in the fierce retail environment of the 1990s the company announced plans in 1992 to transform itself into an integrated operating company. As part of this transition, the company also began to centralize company-wide its procurement, warehousing, inventory control, distribution, marketing, payroll and human resources operations. Another aspect of the plan involved the consolidation of the central support organizations of the drugstore and grocery store operations. At the same time, American Stores sought to initiate faster growth, this time primarily through the opening of new stores and not through acquisitions. This ambitious plan to create better efficiencies won a lot of support from investors. The plan, called the *Delta Project*, was expected to turn American Stores into a more profitable national supermarket company with greater shareholder value by centralizing its buying operations, as well as putting together more food and drugstore combination stores.

From 1992 up through 1998, American Stores consolidated operations and moved major responsibilities of their subsidiaries to their headquarters in Salt Lake City, Utah. The company's employees based in Salt Lake City increased from fewer than 100 in 1992 to over 1,200 by 1998. During this period, American Stores itself did not operate any food or drugstores in Utah having sold-off the Osco Drug and Alpha Beta Utah stores in 1991.

#### Super Saver Food

In early 1994, American Stores launched a discount warehouse food store concept in California. New store formats were built in Anaheim, Indio, National City, Oceanside and several existing Lucky stores were converted to this warehouse format in Sacramento, Pittsburg, Vacaville, and Woodland. Initially, these stores were named *Price Advantage*, based on a *Lucky Advantage* prototype store in Escondido, California. Price Club sued American Stores over name infringement shortly before the grand opening of the stores. The stores were swiftly renamed *Food Advantage* the night before grand openings, with the word "Price" marked out with a thick ink marker on every label, tag and sign in the store. In the coming months these stores were branded as *Food/Price Advantage* and finally as Super Saver Food. Super Saver Food was a familiar brand which had been used in the 1970s and early 1980s by Acme for their discount grocery store format in Pennsylvania and was a trademark still owned by American Stores.

#### Kap's Kitchen and Pantry

In 1997, the company opened *Kap's Kitchen and Pantry* in Salt Lake City, Utah, a prototype for entry into the high end food retail market with selections of natural and organic products, produce, seafood, grocery, meat and poultry, bakery and prepared foods. The venture was quickly abandoned and the store was closed within a year.

#### Skaggs Family Exit

In 1994, at the company's annual shareholder meeting, the company board elected Sam Skaggs’ son Don L. Skaggs a director effective October 1, 1994, to fill the position rendered vacant by the resignation of Aline W. Skaggs, wife of Sam Skaggs. Don L. Skaggs was also the Executive Vice President and General Manager of Skaggs Telecommunications Service, Inc. a non-retail subsidiary of American Stores consisting of an audio media production company, a satellite teleport U.S. Satellite Corporation and an operation that sold equipment to law enforcement agencies. Seventy-two-year-old Sam Skaggs relinquished the chairmanship of American Stores to Victor L. Lund in 1995. Skaggs still held an 18.3 percent stake in the company and a seat on the company board, and when he announced in July 1996 that he was exploring options for his stake, speculation about a possible takeover ran wild. The company was not certain if Skaggs’ intention was to launch a proxy fight for control of American Stores or to alter its current management or direction. By February 1997 an agreement was reached between American Stores and Skaggs whereby the company would repurchase about 12.2 million of Skaggs's shares for $550 million, with the remaining shares subsequently be sold to the public through a secondary offering. This purchase reduced Skaggs’ stake in the company to five percent, insufficient ownership for him and his family members to retain seats on the company's board.

## Acquisition by Albertsons

At the company's June 17, 1998, annual meeting of shareholders in Salt Lake City, American Stores highlighted its accomplishments over the past year and its plans for the sustained long-term growth. In his keynote address, chairman and chief executive officer Victor L. Lund said, *"During the past year, we have transformed many of our key plans for the future to reality. We are confident that our plan for growth is working and is squarely on track. We've set our sights very high because we know our visions of tomorrow will be achieved".* A day earlier, American Stores had held a ceremony marking the opening of the *American Stores Center*, its 24 story corporate office building in downtown Salt Lake City, Utah. The building had a company-owned Italian restaurant, *Il Sansovino* and a convenience store, *The American Store*, on the ground level floor.

Six weeks later, on August 3, 1998 it was announced that Albertsons would acquire American Stores for $11.7 billion. Soon after the announcement, the Federal Trade Commission charged that Albertsons' proposed acquisition of American Stores would substantially lessen supermarket competition in California, Nevada, and New Mexico. The proposed acquisition, the FTC charged, could result in higher prices or reduced quality and selection for consumers. As a condition of the sale, Albertsons' and American Stores agreed to sell 144 supermarkets (104 Albertson's supermarkets, 40 American Stores' Lucky supermarkets) in 57 markets in order to resolve. The divestiture agreement, was the largest retail divestiture ever required by the Federal Trade Commission. Due to the mandated sale of stores, the acquisition took nearly a year to complete. In June 1999, the acquisition was complete, **ASC** was de-listed on the New York Stock Exchange and American Stores ceased to exist until Albertsons renamed it's holding company to American Stores in 2001.

In January 2001, American Stores restructured its "districts" to a divisional structure mostly based around distribution centers, with a drug store division and 18 regional division offices.

### 2001–2004 restructuring[edit source]

On July 18, 2001, Larry Johnston, the new chairman and CEO of Albertson's, announced it would close 165 "underperforming" stores spread across 25 states, cut jobs, and reduce its newly created operating divisions. The first change was that the Utah, Idaho, and Big Sky (Montana) division were merged back into Intermountain, while Oregon, Washington, and the Inland Empire (eastern Washington and Northern Idaho) division would be consolidated back into a single Northwestern division. Albertsons sold its freestanding Osco Drug stores in the northeastern states to Jean Coutu Group, a Canadian drug store company (those stores were re-branded as Brooks Pharmacy after the sale was completed in January 2002). In 2001, the short-lived Des Moines stores would close as well and Albertsons began to issue Albertsons Preferred Savings Cards for all of its stores.

The following year, three more divisions were closed entirely:

* **San Antonio**: Having been in San Antonio since the Skaggs Albertsons days, at the time Albertsons was ranked as the area's number two grocer by market share, compared to H-E-B's top position in the market. At the time of the withdrawal, the 44-store H-E-B chain held a commanding 61 percent market share, while Albertsons held a 15 percent market share. Albertsons had held the third position at the time Kroger exited the market in mid-1993 when it closed its 15 area stores. Then, H-E-B's 37 area stores held a 43.2 percent market share, Kroger's 15 area stores a 13.7 percent share, and Albertsons' 10 stores a 13.1 percent share. The remaining stores in the San Antonio division, primarily in the Austin area, became part of the Dallas division. The last store in South Texas to close, a store in Victoria, Texas, was closed in October.
* **Mid-South**: In 2002, Albertsons shuttered its Mid-South division by selling its Seessel's supermarket chain in Memphis to Schnucks and stores in Mississippi to Brookshire's. The stores in the Nashville area, most of which were former Bruno's stores, were sold to Publix.
* **Houston**: After entering the market in the early 1990s, the troubled Houston division would be gone too, with Albertsons closing its 43 area stores, with most reopening as Kroger or Randalls (acquired with Safeway in 2015 and subsequent return to Houston), with 2 of them becoming H-E-B stores. The Louisiana stores from that division joined the Florida division (though they would move to the Dallas division soon after), while the stores in the Bryan–College Station area became part of the Dallas division. The Greater Houston distribution center near Katy, built in 1996 was sold to 99 Cents Only Stores in 2003.

Additionally, the distribution center in Tulsa, Oklahoma, (home of the Great Plains division) was sold to Fleming Companies, though no stores were closed. The Great Plains division stretched all the way into Omaha, Nebraska. The sale of the distribution center included a distribution deal for Fleming to continue to supply Oklahoma and Omaha.

After stabilizing the company's finances and consolidating divisions, in 2004, Albertsons acquired Shaw's Supermarkets and Star Market from Sainsbury's for $2.5 billion. Albertsons also purchased Bristol Farms for $135 million. During the same time, Albertsons exited the markets of Omaha, Nebraska, where it closed or sold 21 stores, and New Orleans, Louisiana where it closed seven, selling four to A&P, which converted them to Sav-A-Center.

### Sale to Cerberus and SuperValu[edit source]

Despite this, the acquisition spree had caused significant problems for Albertsons, Inc. Many of the acquired chains had systems that did not mesh well with Albertsons. Financing those acquisitions required Albertsons Inc. to take on significant debt. Added to those problems were significant changes in consumer buying patterns, including new competition from large discounters such as Walmart and Costco that impacted sales.

After several assessments of the company and months of rumors, it was announced on January 23, 2006, Albertsons, Inc. was to be sold to a consortium of companies. SuperValu would take the bulk of the company including the brand names and what was considered to be the stronger divisions, including the Albertsons divisions of Southern California, Northwest, and Intermountain, as well as the ACME, Shaw's Supermarkets and Star Market, Bristol Farms, and Jewel-Osco brands.

CVS would acquire 702 stand-alone Osco and Sav-on Drug stores (closing about 100 of them) and converting them to CVS/pharmacy stores.

What was left of Albertsons Inc. became Albertsons, LLC, purchased by a Cerberus-led group of investors, and CVS Pharmacy. The acquisition was completed on June 2, 2006, with the Cerberus-led group (who also included Kimco Realty Corporation, Schottenstein Stores Corp., Lubert-Adler Partners, and Klaff Realty). They held Albertsons LLC as "AB Acquisition LLC". Albertsons LLC included 661 stores and the distribution centers and offices from five of Albertsons divisions. These five divisions were thought to be Albertsons' five weakest divisions, and conventional wisdom in the industry was that the stores would eventually be closed or sold to other operators.

As of June 2, 2006, the company's retail stores were divided as follows:

* SuperValu had acquired 1,124 stores in the deal, including:
	+ ACME (134 locations)
	+ ACME Express, Jewel Express, and Albertsons Express (107 fuel centers)
	+ Albertsons (564 locations in Southern California, Idaho, Montana, Nevada, North Dakota, Oregon, Utah, Washington and Wyoming) – New Albertsons Inc. (later sold to Albertsons LLC)
	+ Bristol Farms (11 locations)
	+ Jewel and Jewel-Osco (198 locations)
	+ Lazy Acres (1 location)
	+ Max Foods (4 locations) (3 converted into Lucky, 1 became Albertsons in July 2006)
	+ Osco Pharmacy and Sav-on Pharmacy (906 in-store pharmacies)
	+ Save-A-Lot (2 stores franchised by Shaw's)
	+ Shaw's (169 locations)
	+ Star Market (20 locations)
	+ Distribution centers (11 centers)
* CVS acquired all (approximately 702) of the stand-alone Osco Drug and Sav-on Drugs rebranding them all as CVS Pharmacy, though they closed approximately 100 of the acquired stores. Many CVS locations were close to Sav-on stores. CVS also acquired one distribution center.
* The Cerberus-led Albertsons LLC retained:
	+ Albertsons (655 locations in Arizona, Northern California, Colorado, Florida, Louisiana, New Mexico, Oklahoma, Texas, and Wyoming – Albertsons LLC)
	+ County Line Liquors (1 location)
	+ Grocery Warehouse (1 location)
	+ Jewel-Osco (2 locations)
	+ Max Foods (2 locations)
	+ Super Saver Foods (23 locations, 21 closed in late 2006)

Following the sale, Albertson's, Inc., was removed from the NYSE. Albertsons LLC was technically the successor company to Albertsons according to SEC filings but it was New Albertsons Inc. that assumed most of the debt, got most of the property, and transitioned Albertsons stock into SuperValu stock.

The five Albertsons Inc. divisions that remained as Albertsons LLC were the Dallas/Fort Worth division (Texas excluding El Paso, Oklahoma, Louisiana, and Arkansas), the Rocky Mountain division (Colorado, Wyoming (excluding Rock Springs and Jackson stores), Nebraska, and South Dakota), the Southwest division (Arizona, New Mexico and El Paso, Texas), the Florida division (Florida), and the Northern California division (northern California and northern Nevada). Albertson's LLC has concentrated on rebuilding market share and its store base in its strongest areas and divesting stores and other property in its weaker areas.

On June 6, 2006, only one week after Albertsons LLC was created, the company announced its intent to close 100 Albertsons stores by August 2006, including all but two Super Saver stores. Those closures were spread across all five divisions. Soon after, the company announced that it would be shutting down its online delivery service on July 21, 2006. To distinguish the two companies, Albertsons LLC created a second website, *AlbertsonsMarket.com*.

### A leaner company

In November 2006, it was announced that the Northern California division, consisting of stores located in northern California and northern Nevada, would be sold to Save Mart, with the deal closing in February 2007. The company gradually converted all the stores to its Save Mart banner over summer 2007, except for stores in the San Francisco Bay area, which were rebranded as Lucky. The deal included two Northern California distribution centers. Most of the Albertsons locations had originally been branded as Lucky before Albertson's 1999 purchase of American Stores.

Most of the changes in the next six years would downscale the remaining divisions. In the Dallas-Fort Worth division, in 2007, the distribution center was sold to Associated Wholesale Grocers, and Albertsons would exit both Oklahoma and Austin. The Oklahoma stores were sold to Associated Wholesale Grocers associates while the Austin stores were sold to H-E-B. With the closures, only four stores south of the Dallas-Fort Worth area existed in Texas, all of which were closed or sold by December 2011. Additionally, many of the Dallas-Fort Worth stores closed during this time, even into 2011.

The Florida division, which was always discontiguous with Albertsons' main market, suffered a blow in June 2008 when Albertsons LLC entered into an agreement with Lakeland, Florida-based Publix stores to sell 49 Florida Albertsons locations to the chain. This included 15 stores in Northern and Northwest Florida, 30 locations in Central Florida, and four locations in South Florida. The sale was completed in September. In April 2012, the company closed most of its stores in Florida. The Plant City distribution center was sold to Gordon Food Service though the Florida Division continued to be located there. By April 2012, only four stores remained in the entire state of Florida.

The Rocky Mountain division slowly shed stores. By April 2007, there were only 32 stores left in the state of Colorado. In December 2007, SuperValu acquired the eight remaining Wyoming locations from Albertson's LLC not already owned by the company. These stores continued to operate under the Albertsons banner. 2008 also brought the sale of Albertsons' lone South Dakota and Nebraska stores to Nash Finch. In August 2009, the distribution center and division office closed and the 26 remaining stores moved to the Southwest division.

Only the Southwest division was spared the major cuts suffered by the other divisions. On June 12, 2007, Albertson's LLC agreed to acquire all Raley's locations in New Mexico. The acquisition includes one closed and eight operating stores in Albuquerque and one store in Taos, thus doubling Albertsons store base in the Albuquerque region.
A typical Albertsons-Savon store in Dallas, Texas in October 2005. This store has since been sold as part of FTC-ordered divestment, and later became Minyard Sun Fresh Market, but has since closed.
In June 2007, Albertson's LLC decided to discontinue its Preferred Savings Card Program, choosing instead offer discounted items to all of its customers. In September 2007, all Albertsons stores in the Dallas/Fort Worth, Texas, and Florida markets began collecting their Albertsons Preferred Savings Cards. and in May 2008, Albertsons exited the fuel business and sold 72 Albertsons Express gas stations to Valero Energy, which converted most of them to Corner Store locations.

### New Albertsons acquisition[edit source]

While Albertsons LLC had restored its stores to profitability, SuperValu's New Albertsons Inc. had done poorly. While SuperValu did remodel many stores and open a few new stores, New Albertsons had shrunk. Of the 1100+ stores SuperValu acquired in 2006, less than 900 remained by 2013. Under SuperValu, Bristol Farms had been sold off, 36 Utah stores were sold to Associated Food Stores (leaving just three traditional Albertsons stores in the state), the Wisconsin Jewel-Osco stores had been sold or closed, as well as the Shaw's stores in Connecticut. Additionally, like Albertsons LLC, most of the fuel stations had been shuttered or sold to other operators.

On January 10, 2013, it was announced that SuperValu was selling New Albertsons (Albertsons, ACME, Shaw's/Star Market, and Jewel-Osco, though they had previously sold off Bristol Farms in 2010) to Cerberus Capital Management. The deal was closed in March 2013. On February 23, 2013, AB Acquisition announced it would split operations of the newly combined company into eight divisions: Northwestern, Intermountain, Southern California, Southern, Jewel-Osco, ACME, Shaw's, and Southwestern, and in March 2013, the deal was officially closed. On paper, Albertsons LLC controlled the Albertsons-branded stores and New Albertsons Inc. controlled ACME, Shaw's/Star Market, and Jewel-Osco, but it was operated as one company.

On June 11, 2013, Albertsons announced its plans to merge its duplicate websites, social media accounts and mobile apps onto one of each kind, ending the use of the Albertsons Market branding (though this was never used on store exteriors) and AlbertsonsMarket.com. While its website consolidation appeared to take place as expected, its applications received bad reviews—but the biggest consequence was the mistaken deletion of their previous Facebook page and loss of over 200,000 fans. While no details were given as to the mistake made, Albertsons simply admitted that while attempting to join their Albertsons page with over 200,000 Likes and their Albertsons Market page with over 80,000 Likes, something went wrong resulting in the loss of thousands of Likes and comments.

That same month, Albertsons did away with the Preferred Savings Card in the former SuperValu stores that Albertsons LLC had dispensed with in 2007. The cards briefly continued in Southern California stores before being discontinued in July 2013.

### United Supermarkets acquisition[edit source]

On September 9, 2013, the company acquired Lubbock-based supermarket United Supermarkets LLC. On February 4, 2014 the FTC voted 4–0 to approve the deal. The acquisition deal cost Albertsons $385 million and required Albertsons to sell its single stores in the Amarillo, Texas and Wichita Falls, Texas markets. The United Supermarkets family brands include Market Street, Amigos, and United Express.

After the deal was finalized, the Albertsons Market brand was revived for Albertsons stores operated by United. The first to be branded as such opened in Alamogordo, New Mexico in January 2015.

### Safeway acquisition[edit source]

On February 19, 2014, Safeway began to explore selling itself, and by February 21, 2014, it was in advanced negotiations with Cerberus Capital Management. On March 6, 2014, Cerberus (parent company of Albertsons) announced it would purchase Safeway for $9.4 billion in a deal expected to close in the 4th quarter of the year.

On July 25, 2014, Safeway stockholders approved the merger with Albertsons.

In December 2014, Albertsons announced that the Haggen Company, a Bellingham, Washington, based grocery chain, was buying 146 Safeway, Albertsons and Vons stores, as required by the antitrust review of the merger.

On January 30, 2015, Albertsons officially acquired Safeway Inc. after being cleared by the FTC, thus giving it control of the Safeway store banners, including Randalls, Tom Thumb, Carrs Safeway, Vons, and Pavilions, plus Safeway's 49% share of Casa Ley, a Mexican grocery chain. Following the merger, Albertsons announced the new company would have 14 divisions led by three regional offices.

East Region
* Acme Division: East Region, existing Acme Markets (based in Malvern, PA).
* Eastern Division: East Region, existing Eastern Division of Safeway (based in Lanham, MD). Includes stores in Maryland and Virginia.
* Jewel-Osco Division: East Region, existing Jewel-Osco (based in Itasca, IL).
* Shaw's Division: East Region, existing Shaw's/Star Market (based in West Bridgewater, MA).

North Region
* Denver Division: North Region, existing Safeway Denver division with some Albertsons stores from Intermountain. Includes stores in most of Colorado (except for the Grand Junction stores which are part of Intermountain, and the Durango stores which are part of Southwest), the eastern two-thirds of Wyoming, all of Nebraska and South Dakota, and Farmington, New Mexico.
* Intermountain Division: North Region, most of the existing Albertsons division with some Safeway stores from the Seattle Division. Includes all stores in North Dakota, most of Idaho except for the northern panhandle (which is part of the Seattle Division), most of Utah except for the far southern portion (which is part of the Southwest Division), northeastern Nevada, the western third of Wyoming, and stores in the Grand Junction, Colorado area.
* Northern California Division: North Region, existing Safeway division (based in Pleasanton, CA). Includes stores in northern California and northwestern Nevada.
* Portland Division: North Region, existing Safeway Portland division with Albertsons stores from Northwestern in Oregon. Includes the entire state of Oregon except for Ontario, plus Clark County, Washington.
* Seattle Division: North Region, existing Safeway division with some Albertsons stores from Northwestern. Includes all stores in the state of Washington (except Clark County) and in the northern Idaho Panhandle.

South Region
* Houston Division: South Region, existing Randalls/Tom Thumb division of Safeway, with the inclusion of South's Florida stores and southern Louisiana stores. Tom Thumb moved to Southern Division. Includes stores in Houston and Austin-areas and all Louisiana and Florida stores.
* Southern Division: South Region, existing Albertsons South division (based in Fort Worth, TX) combined with Tom Thumb stores. Includes stores in northeastern Texas, northern Louisiana, and all of Arkansas.
* Southern California Division: South Region, merged Vons Safeway division (excluding southern Nevada/Las Vegas stores, which became part of the new Southwest Division) with Albertsons division (based in Fullerton, CA). Includes stores in southern California.
* Southwest Division: South Region, merged Southwest Safeway and Albertsons divisions (based in Phoenix, AZ). Includes all stores in Arizona, southern Nevada, and Utah, most of New Mexico (except for Farmington which is part of the Denver Division and southeastern New Mexico which is part of the United Division), and El Paso, Texas.
* United Division: South Region, existing United division (based in Lubbock, TX). Includes stores in the Texas Panhandle and western Texas (excluding El Paso, which is part of the Southwest Division), and southeastern New Mexico.

### Announcement and postponement of going public and A&P acquisition

After several months of rumors, the combined operation announced it would go public as Albertsons Companies, Inc. (the new name of AB Acquisition LLC). Albertsons attempted to IPO with the ticker ABS on October 14, 2015, planning to raise as much as $1.7 billion, selling 65.3 million shares with a range of $23 - $26 per share. However, the company postponed the listing due to market conditions, particularly after Wal-Mart warned of more challenged sales earlier that day. Albertsons has reportedly postponed the IPO indefinitely, as of October 2015. All during this time, Albertsons continued to expand, purchasing 70 stores owned by the bankrupt Great Atlantic & Pacific Tea Company (operating under the names of The Food Emporium, A&P, A&P Fresh, Superfresh, and Pathmark), which were quickly reopened as ACME stores after two-day store resets.

### Post-Safeway acquisitions

At the time of the Albertsons-Safeway merger, the 18-store Pacific Northwest chain Haggen purchased 146 West Coast Vons, Pavilions, Albertsons, and Safeway locations that had to be sold due to anti-trust concerns, paying $300 million, plus spending $100 million to rebrand the stores. The FTC had hoped this would create a regional competitor for Albertsons. On September 1, 2015, Haggen announced that the company had filed a lawsuit against Albertsons LLC and Albertsons Holdings LLC ("Albertsons") seeking more than $1 billion in damages. The complaint, which was filed that day in United States District Court for the District of Delaware, alleged that following Haggen's December 2014 purchase of 146 Albertsons and Safeway stores, Albertsons engaged in "coordinated and systematic efforts to eliminate competition and Haggen as a viable competitor in over 130 local grocery markets in five states," and "made false representations to both Haggen and the FTC about Albertsons' commitment to a seamless transformation of the stores into viable competitors under the Haggen banner."

A week later Haggen filed for Chapter 11 bankruptcy and began the process of closing all but a few dozen 'core' stores in the Pacific Northwest. Albertsons would buy back 33 of the stores being sold at auction. In January 2016, Albertsons settled the lawsuit, agreeing to pay $5.75 million to Haggen, and subsequently reached an agreement to acquire the remaining 29 'core' Haggen stores located in Washington and Oregon for $106 million, the deal being approved on March 29, 2016. As part of the deal, 15 stores would still operate under the Haggen banner, with the rest converted to Albertsons locations.

During this time, the Albertsons family experienced further changes. On January 11, 2016, it was announced that the three remaining Albertsons stores in Florida, located in Largo, Altamonte Springs and Oakland Park, would be re-bannered as Safeway; this marked the first time that the Safeway brand would exist on a supermarket operation in Florida. It would also re-align the stores toward the Eastern Division. In 2016, smaller acquisitions included Homedale, Idaho-based Paul's Market and Santa Rosa, California-based G&G Supermarkets. Both brands were closed before they were converted into Albertsons and Safeway stores, respectively. Additionally, the United Supermarkets subsidiary acquired seven locations from Sweetwater, Texas-based Lawrence Brothers. These were converted into United Supermarkets or Albertsons Market stores. In late 2016, it was announced that Andronico's in the San Francisco area would be acquired as well. These stores would become "Safeway Community Markets" and still hold what made Andronico's unique, including chef-prepared items. When the first store reopened in February 2017 under the ownership of the Northern California division, it was still bannered as Andronico's due to an issue in obtaining local permits but the other stores were able to reopen as Safeway Community Markets.

On February 17, 2017, the Randalls store in south Katy, Texas, serving the Cinco Ranch area closed. On March 6, 2017, shortly after the Katy Randalls closure, it was announced that the Houston-area distribution center near Cypress, Texas, would be closed and the operations consolidated in the Roanoke, Texas Tom Thumb distribution center in the Dallas–Fort Worth metroplex to supply the Houston and Austin-area stores instead. Also, the Houston Division offices would be folded into the legacy Albertsons' South Division offices in Fort Worth. Additionally, the stores in the Albuquerque, New Mexico, market were realigned toward the United Supermarkets division. On September 20, 2017, Albertsons acquired meal kit company Plated for $200 million.

On February 20, 2018, Albertsons announced plans to acquire Rite Aid, subject to shareholder and regulatory approval. In addition to retaining the stand-alone Rite Aid pharmacies, its Osco and Sav-on pharmacies located in Albertsons' existing stores were expected to be rebranded as Rite Aid pharmacies. On August 8, 2018, Rite Aid announced that the plan had failed to please shareholders and the proposed acquisition would be canceled.

That same year, Albertsons closed several stores across multiple divisions, including all three Safeway stores in Florida. These stores were sold to Publix for an undisclosed price.

In 2019, Albertsons opened Albertsons Market Street in Meridian, Idaho, a flagship store located in a converted Shopko store and based on the Market Street brand of United Supermarkets. This became Albertsons largest store at 110,000 square feet and featured a variety of departments exclusive to the store or found rarely in the chain, including an oyster bar, a full bar area, and in-house sausages. Additionally, around the same time, a new Andronico's Community Markets opened in Monterey, California, the first new store to be branded as such.

In 2020, American Stores announced the closing of a distribution center in Upper Marlboro, Maryland, laying off up 520 people. Albertsons said its duties will be shifted to an existing distribution center in Lancaster, Pennsylvania, which will add up to 300 workers. Due to the COVID-19 pandemic, American Stores' total sales experienced a growth of 27% compared to the previous year. The rose in sales and higher traffic came as a result of the COVID-19 pandemic; it made $22.8 billion in the second quarter of 2020. Additionally, the company finally went public in June 2020 after years of delays.  The potential IPO for the company could be valued at around $19 billion. During the time of going public, one more division change was announced when the Mid-Atlantic Division was created by combining Eastern and ACME Markets, and based out of ACME's headquarters in Malvern. In October 2020, American Stores submitted a winning bid for the Kings Food Markets/Balducci's chain. These were announced to be combined into the Mid-Atlantic Division.

## Subsidiaries & Assets

### Grocery Chains

American Stores operates grocery stores under the following banners:

* Acme Markets (aka ACME): 163 locations (CT, DE, MD, NJ, NY and PA)
* Albertsons: 400 locations (AZ, AR, CA, CO, ID, LA, MT, NV, NM, ND, OR, TX, UT, WA and WY)
* Albertsons Market: 23 locations (NM)
* Amigos: 4 locations (TX)
* Andronico's: 6 locations (CA)
* Casa Ley: 352 locations (Mexico)
* Carrs: 11 locations (AK)
* Haggen: 15 locations (WA)
* Jewel-Osco: 188 locations (IL, IA, and IN)
* Lucky: 4 locations (UT)
* Market Street: 19 locations (NM and TX)
* Pak 'n Save: 3 locations (CA)
* Pavilions: 26 locations (Southern California)
* Randalls: 32 locations (Greater Houston and Greater Austin, TX)
* Safeway: 896 locations (AK, AZ, CA, CO, DC, DE, HI, ID, MD, MT, NE, NV, NM, OR, SD, VA, WA, WY)
* Shaw's: 129 locations (MA, ME, NH, RI and VT)
* Star Market: 21 locations (MA)
* Tom Thumb: 64 locations (Dallas–Fort Worth metroplex, TX)
* United Supermarkets: 49 locations (Texas Panhandle)
* Vons: 199 locations (Southern California and Southern Nevada)

### Other Chains

American Stores also owns other chains including:

* Ritz Camera & Image

### Brands

American Stores once owned several store brands ("private label" brands), often bearing the name of the chain sold under, e.g. "Jewel" brand products in the Jewel and Jewel-Osco locations. Other American Stores brands over the years have included *A+*, *Good Day*, *Janet Lee* (named after the executive vice-president's daughter), *Master's Choice*, and *Village Market*. The drug store brands (used for health and beauty aids, over-the-counter medications, and intimate paper goods) were consolidated under the name "Equaline", rather than the previous "Sav-On Osco by Albertsons" brand. Albertsons introduced an upscale private label brand, "Essensia", in 2003, which was later renamed by SuperValu as Culinary Circle.

Store brand items in Albertsons stores included Albertsons (national brand quality food), Arctic Shores (frozen seafood), Baby Basics (diapers and infant care items), Culinary Circle ("gourmet" foods and ready-made meals), Equaline (health and beauty products), Farm Fresh (fresh produce), Flavorite (national brand quality foods, used throughout Supervalu stores), Homelife (national brand quality non-foods), Java Delight (coffee), Shoppers Value (value-priced items), Stockman & Dakota (high-quality beef), Stone Ridge (ice cream and sherbet), Super Chill (soft drinks and mixers), Whole Care Pet (pet foods and supplies), and Wild Harvest (natural and organic foods). In 2011, SuperValu announced it would eliminate Flavorite and all brands named after the chains it operates (such as Albertsons, Jewel, Shaw's, etc.) and would replace those labels with a new label, Essential Everyday.

After its purchase of Safeway, Albertsons began replacing some of its brands with Safeway's. O Organics and Open Nature replaced Wild Harvest, Pantry Essentials replaced Shoppers Value, and Refreshe replaced Super Chill. By late 2015, the remaining store brands were replaced with "Signature" (formerly Safeway Care, Farms, Home, and Kitchens). Albertsons started selling Lucerne dairy products, Mom To Mom baby products, and Priority Pet Food as well.

Albertsons Companies line of Own Brands  products launches 1,100 brand new items a year, making it one of the most diverse in-house brands in the country. Albertsons Companies’ O Organics line is one of the nation's largest brand of USDA-certified organic products, with annual sales over $1 billion; it offers a wide array of products, giving every customer on every budget access to healthy, organic items.

Some of the brands in use are:

* Signature Select - Main line of grocery products
* Debi Lilly Design - Floral and home décor products
* Lucerne Dairy Farms - Main dairy brand, used for ice cream, cheese, yogurt, and milk
* O Organics - Organic products
* Open Nature - 100% natural products
* Primo Taglio - Deli brand for meat and cheese
* Signature Cafe - Brand used for things sold at the Deli counter, soups, and refrigerated food made by the Deli and sold in the Deli Department
* Signature Care - Home and wellness products
* Signature Farms - Produce Department brand for fresh fruits and vegetables
* Signature Reserve - Premium alternative to products in the Signature Select line
* Value Corner - A cheaper alternative to products in the Signature Select/Lucerne line
* waterfrontBISTRO - Frozen seafood products

## Operations

On average, stores in the Albertsons Companies range between 50,000 square feet (4,600 m2) and 70,000 square feet (6,500 m2) and almost universally feature a bakery, deli, meat counter, produce department, and seafood counter; many of the stores also feature in-store banks and pharmacies. Larger and newer stores may also offer enhanced amenities, including Starbucks coffee counters, prepared foods, in-store pizza, salad bars, and juice bars.

## See also

* American Stores/Private Labels

Acme Markets | Safeway