The private equity company Cerberus Capital Management announced that it was acquiring Safeway. Cerberus already owns Albertsons. Safeway already owns Tom Thumb. With all of these under one ownership, you can bet changes will come in order to compete. Whether or not the name Tom Thumb stays or goes is only a minor matter.
After the jump, what to expect from the new Tom Thumb overlords.
According to The Washington Post:
The deal is an attempt to compete in the increasingly tough grocery business, which is now crowded by a gamut of retailers, from drugstores and Wal-Mart to local neighborhood farmers markets.
Source: Washington Post.
So, it's not just Walmart, which has one-third of the grocery market, that is forcing change. It's Trader Joe's and Aldi's, which have different business models. It's CVS and Walgreens, which offer convenience. It's Whole Foods and farmer's markets, which offer organic and home-grown produce. The market is changing and supermarkets either have to adapt or perish. Expect a little of both as some stores close and others change their business model.
By the way, did you catch that reference to farmer's markets being a growing force in food retailing in America? Do you remember what the Richardson city council considers farmer's markets to be? Not a growing business model to cultivate, but a potential problem. Richardson is not only on the wrong side on that one; it's playing the wrong game altogether.
Also, did you catch that reference to Whole Foods? Richardson is losing a Whole Foods on Coit Rd while gaining a Walmart across the street in Dallas. That could be a sign of a declining neighborhood. The West Spring Valley Corridor redevelopment effort is stalled or off track altogether. All the while, the city council's attention is entirely focused on the real estate big deal (State Farm, Palisades Village). Look at the recent vision statement the city council put together, or the mayor's recent State of the City address. How many times was the word "neighborhood" used? Zero? One? Neighborhood revitalization has been neglected too long. The supermarkets are the canary in the coal mine.