No Holiday for Safeway
By Jace Hinesly, Staff Writer
For those longing for the humble ways of Safeway in its quaint building with easy parking -it appears you won’t have to wait much longer. Albertsons, which bought the store back from Northwest grocery chain, Haggen, says in its latest news release they plan to re-open this next year, “While no definitive timetable has been established at this time, Albertsons will re-open the stores under its various operating banners in 2016.”
The tale of Safeway has been a long one full of corporate deals and misdeeds which evoke images of smoke filled back rooms. The number and length of court briefs would make Tolstoy blush at the word count.
In our most recent Siskiyou article on this topic we told of Albertsons bidding on the soon-to-be vacated location on Siskiyou Boulevard in Ashland. A bid which is now considered to be successful, once again putting Safeway back under the Albertsons banner. It’s a reversal of fortune for the store initially purchased by Haggen which recently filed for bankruptcy.
Albertsons merged with Safeway in January 2015. The Federal Trade Commission required the businesses to sell one location to keep from having a monopoly effect on the community. FTC Chairwoman Edith Ramirez explained that “Absent a remedy, this acquisition would likely lead to higher prices and lower quality for supermarket shoppers…” Haggen decided to capitalize on the situation and move in but they have filed for Chapter 11 bankruptcy and in doing so left the Ashland location (among others) up for grabs again. Albertsons jumped back in, purchased and will reopen under the original Safeway brand, despite the earlier FTC determination.
Albertsons has filed suit against Haggen for $36 million for claims of having not received payment for inventory at some of the stores Haggen acquired. “Haggen’s acts were fraudulent in nature and done with malice and a willful disregard for Albertsons’ rights,” the lawsuit said.
Haggen fired back with their own lawsuit against Albertsons for $1 billion for “systematic errors”. The lawsuit says “Had Haggen known Albertsons’ true intentions, Haggen would never have purchased the stores, nor would the FTC [Federal Trade Commission] have permitted such a purchase”. The lawsuit provides more explanation, “The practical result of this deception was a consumer walking into a brand new Haggen store and finding the same item on the same shelf, but now priced higher than it was immediately prior to store conversion,”.
Meantime, it appears Albertsons will be able to open Safeway back up almost as if nothing happened as the lawsuits grind on. When asked when the Safeway store will re-open and for any current information, management at Albertsons in Ashland said “I have no idea, I really don’t have any idea.”
Albertsons defends its position about the questionable ethics of the whole situation saying Haggen never really purchased Safeway, “We never actually got paid for it so we never actually lost it. Of course we bid on it, we had the most invested into it already.”
A press release from Albertsons from November 25 2015 states some clarifying information: “The Federal Trade Commission granted Albertsons’ request for an early termination of its required waiting period under the Decision and Order, thus allowing the company to participate in the auction process with respect to these (Haggens) stores. The company expects to close on the transaction in the coming weeks. .”
Some questions still await answers from both the Federal Trade Commission and Albertsons:
Why is Safeway permitted to re-open in Ashland after being forced to leave by the FTC due to an existing Albertsons community presence? When will the Safeway open, and do the prior employees get invited back to work? And a question for the community shoppers; How do you feel about the Albertsons-Safeway merger and how the location swapping has played out in relation to Haggens? Is somebody at fault?
One thing is certain; it’s a complicated case between powerful entities but those most affected are likely employees and shoppers.