Albertsons #2997 - Chandler, AZ

***Today's post is a guest post courtesy of new AFB contributor Monique Sammi, who will be giving us a look at an interesting still-operational Albertsons store in Arizona***

     On November 1, 1989, Utah invaded Arizona.

     It was an invasion that wasn’t announced by tanks, ships, and airplanes. Instead, it was announced with low grocery prices, newspaper ads, everyday low pricing, and analyst predictions of “World War III in the grocery business”.

     It was the day that Smith’s and Albertsons came to Phoenix. Smith’s had an interesting history before it merged with Smitty’s (after rumors of merging with Albertsons!), was bought by Fred Meyer, and then merged with Kroger. Today, the only Smith's stores in Arizona are in Mohave County, all close to Las Vegas, where that banner endures; the rest were all switched to Fry’s in 2000.

     But perhaps more intriguing—and certainly if you like 20-year-old grocery decor packages—is the roller coaster ride that has been Albertsons’ 35-year grocery history in Arizona.

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     Really, that’s 50 years. Albertsons opened its first Arizona store in Yuma’s Southgate Mall on January 30, 1974. (It later moved the store across the street in April 1990, occupying a former Mervyn’s, and opened a second unit there in 2002.) However, despite the company making a name for itself in seemingly every surrounding state, the chain didn’t announce its intent to blitz Phoenix until January 1989, two weeks before Smith's followed suit.

     Smith’s and Albertsons were really two nearly identical sides of the same coin because they had such similar business plans. Aside from Fry’s and Smitty’s, the grocery market leaders in Phoenix, most Valley grocery stores were smaller, on the order of 25,000 to 30,000 square feet. Albertsons was bringing a 60ksf prototype and Smith’s 80ksf. Most Valley grocery stores also employed high-low pricing; Smith’s was EDLP chainwide and Albertsons in about half of its units. Both chains relocated their Southwest division headquarters from Albuquerque to the Valley. A local broker told Progressive Grocer that Albertsons had “big, clean, beautiful stores”.

     Albertsons grew from that first store—at Guadalupe and Rural roads in Tempe, now closed and slated to become an EoS Fitness gym—to 11 units by the end of 1991. Of those, just three are still Albertsons stores, and another two operate as different grocers. The Arizona invasion expanded in January 1994 with the opening of the first Albertsons store in Tucson, a market Smith’s had previously entered before building in Phoenix. And over the 1990s, Albertsons entered Kingman, Lake Havasu City, Prescott, Flagstaff, and other outstate cities, almost all of which they later left with closures or in the 2010s with the Haggen spinoffs. When Albertsons split into three in 2006, there were 60 units in Arizona, half of them in the Valley. It had 11.7 percent of the grocery market, fourth behind Safeway (15%), Bashas’ (15.9%), and Fry’s (28.1%). World War III never came: the high/low operators survived in the besieged market.

     Then something curious happened. After February 2004, when the chain opened its doors on three locations, Albertsons stopped opening new stores—in the mid-2000s, when Valley sprawl was unbelievably hot. The Arizona Republic business section carried a story, “Albertsons not buying: Company’s no-growth strategy could vault Wal-Mart to No. 4 in the grocer market”. Fry’s, Bashas’, and Safeway were opening two to five new stores a year in the metro. Walmart was building more super centers and Neighborhood Markets. And Albertsons was nowhere to be seen. One analyst noted that the chain, accustomed to pushing for first or second place, could not do it without acquiring someone else, and no other grocer was for sale.

     In 2006, Albertsons LLC closed nine of the 60 stores (eight in Phoenix and a ninth in Kingman) which together accounted for just 5.8 percent of overall sales in the 81-store Southwest division (Arizona, New Mexico, and El Paso). The Republic quoted the president of UFCW Local 99 as saying, “Albertsons has been struggling for so long in the Phoenix marketplace. We heard they were trying to sell the Phoenix division.” If they had done so, and the buyer wasn’t Bashas’, it might have been good news for them: Albertsons stores in Arizona, with the exception of the two Yuma units, are non-union. Of the nine closed stores, only one was picked up by another conventional grocer: Bashas’, which acquired the store in Gilbert’s new Morrison Ranch development—the last one Albertsons had opened. Their interest in Albertsons assets was reported in the press: Mike Proulx, the president and COO, told the East Valley Tribune that he was shocked to be bidding on them and said, “Albertsons was the gem of the industry. They were the envy of everybody in the industry.” It operated with the Santa Fe (Albertsons Marketplace) decor package until being renovated in 2018.

     Closures due to underperformance and the Great Recession have whittled the store base of the Albertsons banner down steadily. In 2010, the company had 44 Arizona stores; it made an unsolicited offer to buy Bashas’ out of Chapter 11 bankruptcy, which was rejected. Some of the loss of stores since came in the Haggen divestitures, which included locations in Prescott and Flagstaff where the company now only operates Safeway stores, as well as several units it bought back into the chain when Haggen failed; some units have closed due to their proximity to Safeways. As of 2023, there were 30 Albertsons stores statewide in just four Arizona counties (Maricopa, Pima, Yuma, Mohave) to 105 Safeways in 14 of the state’s 15 counties.

     The future of the Albertsons end of Albertsons Companies in Arizona will be up for shakeup if the Kroger-Albertsons merger goes through. 24 Albertsons Cos. stores and the rights to trade as Albertsons in Arizona will go to C&S Wholesale Grocers in the divestiture package. This raises some questions, namely which stores are planned for divestiture. One would imagine most are already wearing the Albertsons name, but some Safeway stores could go to C&S. In all honesty, one wonders if the Safeway banner will survive after more than 95 years; its Arizona presence dates to the 1928 merger with Pay’n Takit (Arizona Grocery Company), with the stores being bannered Safeway–Pay’n Takit until 1939. Weekly circulars here list both logos with the words "Serving Arizona Since 1928” beneath. While Safeway has had the reputation of being higher-priced, that is a lot of name equity. Not many businesses can say they have traded under the same name, especially in this state, since before World War II.

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     With that huge history out of the way, we can get down to seeing the last intact visual relic of Albertsons’ best years in this market. In early 2000, Albertsons took its plans to build a 57,560sf Albertsons plus an outlot Albertsons Express fuel center to Chandler City Council. The stores would anchor Copper Point, a neighborhood shopping center at the northwest corner of Ray and McClintock roads. The neighbors weren't happy with the initial plans; they wanted more room between them and the store, prompting Chandler City Council to wait two months to approve construction. With approval, Albertsons paid $14.6 million for the 2.8 acres. For whatever reason, this caused the plans to slide back from an early 2001 opening to June 22, 2002. Inside the Albertsons when it opened was a branch of Compass Bank, a Starbucks (even though the shopping center also had one with a drive-thru), a video store…

     Oh, and Grocery Palace decor.

     This store has been repainted a couple of times, and the Osco part of the sign especially shows some massive fading. Which makes sense; this might actually be the last Osco-signed store in Arizona on the inside and outside.

     This shows the “first” repaint to drab browns as well as the Lawn & Garden sign (in green), which hung around a really, really long time after the chain ceased selling such merchandise. Here’s a better look at that area:

     When we enter, we are greeted by sights straight out of the summer of 2002, almost:

     Albertsons’ most significant renovation involved cutting down the full-height wall at the entrance cart corral to a pony wall, which opens the store up right away. This is what you see looking right: the pharmacy/floral island, whose back side contains an Osco Pharmacy sign, a window for the pharmacy manager’s office, and a bunch of in-store displays. The addition of cameras suggests that removing this corral probably helped with store security in various ways.

     That shows the front entrance, which is missing an original feature: the Starbucks Coffee kiosk. Most Grocery Palace stores had these, and I recall it being a new feature to have an in-store coffee shop in this area. This one didn't even last five years, and that’s unusual given that most Albertsons and Safeway stores have a Starbucks. My suspicion is that the reason it closed is…

     You can see a Starbucks out the door when you exit. That is original to the center and has a drive-thru. I wonder if the Albertsons unit cannibalized the sales of the standalone Starbucks and caused the company or the shopping center to complain. (Fun fact: There is now a standalone Starbucks with drive-thru one mile west, one mile north, and one mile east of this store.)

     Other than that, you’ll find the store to be quite intact, though the back service departments (International Deli) have lost their signage and decor; the video department is now an alcove for random machines such as Coinstar and the lottery, the CRTs taking years to leave; and the bank departed after 15 years, replaced with random promotional assortments. (One other area has changed, but we’ll get to it later.) The flooring is original; the layout is mostly unchanged; and it feels like the summer of 2002 barely left.

     The store is set up to channel shoppers to the left when they enter, though there is access on the right between the checkout/floral area and the front entrance. Remember, the wall in front of you would have been full-height originally.

     So let’s get to the front area. This is deli and prepared meats, but with so much room after shedding the coffee kiosk, it tends to be used for promotional displays. One of the counters is pretty much unused.

     Produce is well-signed and does not exhibit some of the fading that some stores have seen in this decor.

     We can look back at produce and see Aisle 1. This is the only grocery aisle on this side of the store, as aisles 2 through 14 are Osco-signed general merchandise, cosmetics, and pharmacy aisles. This store does not have split aisles, a treatment that some units used. Aisle 14 is an Osco aisle but in a reset gained candy, an Albertsons food item, to go along with light bulbs—and it shows in the aisle marker.

     Coming out of produce, we come across that GP classic, the bakery. Bread is displayed under the alcove with its parquet-style floors, while sweets extend on tables further down.

     And past bakery are the International Deli alcove, the service meat and seafood counter, the meat department, and dairy in that order.

     Shorn of its decor and signage (which I remember this having), International Deli makes little sense, but the product assortment hasn’t really changed. It’s a bit weird, especially with my experience with Fry’s and other grocers, to see this department so far from the service deli.

     The service meat and seafood counter with its rustic look and large painted signs has a sort of boardwalk appeal.

     The spotlight in meat provides a clue that it once was signed.

     And what Grocery Palace is complete without the dairy barn?

     After viewing the perimeter departments, we can take a look at center store…

     Starting with the center island that houses an employee break room, floral, and the pharmacy.

     Past floral is the liquor department, also signed Osco.

     One of the last general merchandise aisles is party and cards, which has impeccable original flooring.

     That candy and light bulbs aisle also has…baby flooring.

     Grocery aisles start from 15 and continue to 22.

     The various aisles of groceries end in one and a half aisles of frozen foods. The flooring is original and in fantastic shape.

     Those who have seen other Grocery Palace Albertsons may notice this store never had some of the more extravagant decorations that characterize it for others. There’s no drop ceiling in frozen, no Snack Central, no Beverage Boulevard. I note this is the tail end of this package’s use; the next-oldest Albertsons decor in the Southwest is in the Farmington, New Mexico, store, which uses a Southwestern-flavored version of Industrial Circus and was originally the price-impact Grocery Warehouse when it opened in August 2002.

     One unique thing Albertsons did around this time in Phoenix was have a lawn and garden department including indoor and outdoor sections. (Fry’s Marketplace also had this, going back to when it was Smitty’s.) This did not last past the mid-2000s, though the sign persevered for another decade. Some of the other surviving Grocery Palace stores, especially those that were remodeled to Lifestyle v3 in 2017, had the indoor portion brought into the sales floor and used for liquor. This results in a liquor store signed as it might be in Florida or other states that require such sales to be separate, but it is open to the rest of the store.

     Here, it was at one point converted to a single door, easy to miss, before being restored to use to support pickup and delivery, even with the slider being added back. When it was still a single door, yours truly spotted it open once in 2019, leaving a quick fox time to snap a couple of images inside. It now has industrial refrigerators and shelves of high-turnover center store items to support the DriveUp and Go team.

     This is how it looks now—the only real “reversion” in this store’s history, though the sliders aren’t to lure customers into another department but to help employees with bags on racks.

     The pet department has its original decor, but it’s easy to lose sight of it in this layout. There tends to be patio furniture and seasonal pallets here, too. Pet is kind of out on an island in this layout, not helped by the fact there is one fewer shelf assembly here than the original design specified.

     To the right of pet are the checkouts, but the big industrial ice machine does not do enough to hide the fact that this was also the photo department. Remember when grocers competed with drugstores on photo? It’s surreal to think, but the iPhone was released five years after this store opened, and even then digital cameras were already common enough.

     Video has long since bit the dust, too, but a lot of its trappings minus signage remained for 15+ years, including flooring…

     And CRT television sets. Those have finally come down.

     The in-store bank was Compass Bank, later renamed BBVA Compass when the Spanish banking giant entered. It closed in March 2017…

     …And was promptly turned into more promotional space.

     It doesn’t really fit elsewhere, so here’s a view of the former Albertsons Express, which was rebranded Valero / Corner Store in 2008 and is now Shell / Fast Market.

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     It’s fascinating to think I have one of America’s great retail relics a stone’s throw from me—there are definitely people who would drool at the chance to regularly shop this store—and also concerning. Other stores of this vintage that remained with Albertsons have received renovations. Late last year, I happened to visit a sister Grocery Palace store in Gilbert. This store was renovated to Lifestyle v3 in 2017; the lawn and garden area was added to the sales floor as a liquor department (with a walk-in beer cave built over part of the patio), and pharmacy moved to where pet would be in the front corner. The store is warmer in color temperature and brighter—things that 2997 could really use if it gets attention. I remember thinking of this store as downtrodden, and the lighting is a major factor. Warehouse-ceiling grocers do not have to feel so cold; there’s a Safeway six miles from here that has loads of skylights that really, really help.

     But I can’t help thinking of the whys. In grocery retail, capital expenditure is part of the name of the game, yet here is a time capsule from days when Albertsons was a bit more bright-eyed and bushy-tailed in this market. Why has this store gone unrenovated for more than 20 years, during which time Bashas’ has remodeled once; Fry’s has renovated three times; and a Whole Foods was built *and renovated*? Why did the Starbucks close so quickly? Why have they not bothered with abolishing remnants of things like photo? This is a cool store for retail enthusiasts, no doubt, but it raises so many questions. With the recently announced closure of the ACME in Milltown, New Jersey, this is now one of the last three locations with this package in all of Albertsons Companies (the others are in Battle Ground, Washington, less than a mile from a Safeway, and Yardville, New Jersey).

     2024 marks the 50th anniversary of Albertsons in the Grand Canyon State and the 35th of its Phoenix-market invasion. Smiths and Albertsons, plus local warehouse chain Megafoods, made Phoenix a famously overstored market in the 90s as they rushed to build stores and gain market share while other grocers also had to add locations to keep up with changing population patterns. Megafoods blinked out of existence by bankruptcy in the late 1990s and sold to Bashas’, though the chain didn't take all the stores. Fleming’s ABCO called it quits in 2001 to focus on price-impact banners elsewhere in the country; the store base was scattered among Bashas’ and other companies. And the Valley has remained cutthroat as ever, not even considering Walmart and Costco: WinCo and now Aldi have presences here, while Fresh & Easy tried and sadly failed. In fact, three weeks after Albertsons 2997 opened, a little store called Sprouts Farmers Market opened two miles down the road, planting the seed from which germinated a locally based national grocer with 400 stores.

     Whoever runs this store in the wake of whatever happens with Kroger-Albertsons will have decisions to make. If this store is marked for divestiture, can C&S give it attention given how far it is from other stores they will presumably own and the reduced size of the Albertsons banner? If Kroger succeeds, does this store get absorbed into the already very busy Fry’s Marketplace a mile away? Could another grocer show up here in a few years’ time? You could say these questions are… Palace intrigue.

***Thank you Monique for sending over this post and sharing these photos - it was great taking a look at one of the last few Grocery Palace Albertsons stores left in the chain! -AFB***