When Albertsons acquired Safeway in 2014, it had a huge effect in the Prescott area. Grocery store competition decreased when Albertsons closed their stores, leaving two Safeways and two Frys in the area. Haggen had a disastrous opening, then closed in what seemed to be a blink of an eye. Jobs were lost and it seemed like consumers paid more for everything.
However, a fresh ray of grocery-hope entered the region in 2014 when Sprouts opened their doors in Prescott Valley. Over a thousand people were on hand for the pre-opening event, and shoppers happily filled their carts with fresh, reasonably-priced produce, meat and other delicious things. This month, Sprouts opened the doors at the completely remodeled Albertsons-Haggen location in Prescott and local shoppers rejoiced. The first double-ad Wednesday brought so many customers that the parking lot almost ran out of open spaces.
The Prescott Sprouts parking lot on double-ad Wednesday.
Finally! Grocery shopping was set to settle down into a competitive, diverse group of opportunities in the quad-city area. Shoppers were able to compare more than two ads per week, make their lists and find what they needed at reasonable prices.
But, now, that could all be threatened. Bloomberg reports that Albertsons is in preliminary talks to merge with Sprouts Farmers Market. The discussions are said to have taken place recently, and would take Sprouts private (yes, you can buy Sprouts stock <SFM.O> now). This acquisition would bring a natural and organic-foods focused business to the Albertsons portfolio of supermarkets - which already includes Safeway, Vons and Shaw’s.
Sprouts is growing, with 11 new stores planned across the country from California to its first location in Georgia. But, Bloomberg reported in September, that Sprouts CEO Amin Maredia said that deep price cuts driven by deflation were “not sustainable.” Lower prices at larger conventional stores had left Sprouts, “exposed a little bit.” In the meantime, grocery chains such as Albertsons, Kroger (parent company of Frys) and even WalMart have been expanding their selection of organic foods as consumers demand better and fresher produce.
Currently, Bloomberg reports that the discussions between Albertsons and Sprouts “...are at an early stage and may not lead to a deal.”