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Sunday, Apr 13 2014 05:00 PM

Ask TBC: Will the grocery chain sale close stores?

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By The Bakersfield Californian

Q: A recent Friday morning paper had an article regarding Safeway being sold to Albertsons. We shop regularly at Vons stores, which are owned by Safeway. Any word on whether our Vons stores will become Safeways? How will this buyout affect the Bakersfield community?

-- Molly McKean Sabat

 

A: The short answer is that for now, no one really knows.

The seven Vons stores in Kern County -- all owned by Safeway -- will merge with Albertsons stores as part of a $9.4 billion transaction last month orchestrated by Cerberus Capital, a private equity firm that owns Albertsons. The merger is dependent on approval from shareholders and the Federal Trade Commission.

The results of exactly what that March 6 announcement means for local employees and stores remains unclear.

The merger would mate Safeway, the nation's second largest supermarket chain, and Albertsons, the country's fifth largest. It would give Safeway more than 2,400 supermarkets and 250,000 employees nationwide, and analysts have speculated that large number could lead to future layoffs.

But Safeway spokesman Brian Dowling said last week there will be no store closures.

Albertsons spokeswoman Lilia Rodriguez said it was too soon to speculate if any jobs would be lost. But in February, Albertsons closed more than two dozen underperforming stores in eight states, including 11 locations in California. None of those was in Kern County.

When the FTC reviews the proposed Albertsons-Safeway deal later this year, some stores may be required to be sold to satisfy federal antitrust rules, Dowling said.

In cases like that, the FTC is trying to maintain competition, he said.

Currently, Safeway Inc. has 1,335 stores and Albertsons has 1,075 stores in the United States. The two companies have 678 stores in California.

Kroger is the country's largest supermarket chain with 2,600 stores.

 

Q: After reading your article on a newly acquired company that will be delivering your newspaper, a few informational items were left unanswered in your article.

Is this company only delivering to subscribers who missed a delivery (which is what was mentioned twice), or is this new company actually delivering to ALL of your subscribers daily?

If the latter is true, I would really like to know what you did to all of your "independent contractors" (paperboys)? As a former carrier for The Californian for 10 years in the 1980s and 1990s, and a subscriber since 1982, your answer may hinge on my future subscription.

-- Tony Valenti

 

A: Californian President and CEO Richard Beene answered:

The people who deliver the newspaper have never been employees of The Californian. As independent contractors, they always ran their own businesses and simply contracted with our company to make household delivery, just as you did, Tony, back in the 1980s and 1990s.

We made the decision to let another company work with these contractors because we need to focus on our core competencies of providing relevant news and information and helping local advertisers grow their businesses.

(This is not a new concept. Apple, for example, is a software company that outsources the manufacturing of its iPhones to companies in China).

We are not in the delivery business just as we are no longer in the printing business. (Some years ago we outsourced the printing of The Californian for similar reasons). Our business was, and remains, connecting readers with relevant news and advertising.

I believe most of the people who contracted with us to deliver the paper are now contracting with CIPS Marketing Group to do the same. CIPS is a leading distribution and marketing company and it makes its own decisions on whom to hire. We don't ask.

Ask TBC appears on Mondays. Submit questions to asktbc@bakersfield.com or to The Bakersfield Californian, c/o Christine Bedell, P.O. Bin 440, Bakersfield, CA 93302.

 

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