Arizona Region Market Report
Arizona's family-owned Bashas' Markets supermarket chain announced today it plans to close additional stores in the state, along with laying off more employees.
Through its spokesperson Kristi Nied the 160-store hometown Bashas' chain said it will close five to ten underperforming stores in Arizona under its flagship Bashas' banner and its Food City Latino format banner. Three or more of the stores will be in the Metropolitan Phoenix region where Tesco's Fresh & Easy has 30 of its small-format, Fresh & Easy grocery and fresh foods markets.
Bashas' also says it will eliminate about 700 jobs. The number of layoffs could exceed the 700 by at least a couple more hundred if Bashas' ends up closing close to or the full 10 stores, a source in a position to know told us today.
The 700 eliminated jobs comes on the heels of the grocery chain laying off about 350 employees in late January of this year, as we reported and wrote about in this February 6, 2009 news and analysis piece: Arizona Market Region Analysis: Bashas' Worker Layoffs, Closing of Stores Could be the 'Canary in the Coal Mine' in Ultra-Competitive Arizona Market.
Additionally, in the summer of 2008, Bashas' laid off about 250 employees in what then was its very first round of worker firings, which it attributed to the severity of the economic recession in Arizona, along with the intense competition in the food and grocery retailing sector in the state. [June 8, 2008: June 8, 2008: Arizona Region Market Report: First Signs of A Weakening Might Be Starting to Show in the 'White-Hot,' 'Super-Competitive' Arizona Market.]
As we wrote about in this April 1, 2009 story [Competitor News: Bashas' Chain Launching 10,000-Plus Item Storewide Price Slashing Program This Week in its Arizona Supermarkets], Bashas' fired a competitive salvo in its home market of Arizona by slashing the prices on over 10,000 items in its 150-plus stores in the state.
Bashas' operates 150-plus stores in Arizona, where it is headquartered, under its flagship Bashas' banner (the majority of stores); Food City, its Latino-focused format banner; A.J.'s Fine Foods, an upscale and specialty banner; Eddie's Country Store; and Bashas' Dine (prepared foods focus). Bashas' also operates a small chain of liquor stores in Arizona called Sportsman's Fine Wine & Spirits.
The firing of the 700 employees announced today by Bashas' is its third since the summer of 2008. It appears that competition is such for the grocer that in addition to launching is price-slashing and promotional program just a few weeks ago, it still needs to cut costs on the expense side of the ledger, closing the five to 10 stores and laying off the 700 employees.
Since Fresh & Easy Buzz was saying nearly a year ago, like in this story, [June 8, 2008: Arizona Region Market Report: First Signs of A Weakening Might Be Starting to Show in the 'White-Hot,' 'Super-Competitive' Arizona Market], that something would have to give among one or more chains in Arizona in terms of what we call the white hot competitive food and grocery market in the state, coupled with the recession and housing foreclosure crisis, both which have hit the state particularly hard, we aren't surprised Bashas' is closing additional stores and laying off more employees. Although the 700 employees is more than we anticipated, on top of the about 500 already let go since the summer of 2008.
Unlike Wal-Mart, Safeway, Kroger's Fry's, and even Tesco's Fresh & Easy, all players in the Arizona market and all owned by public companies that are among the largest retailers in the world, Bashas' is a privately-held company that has all but just a few of its stores in Arizona. As a result, it doesn't have the kind of capital these publicly-held mega-retailers do to buffer it in the current super-competitive and economically-challenged climate in Arizona, particularly since the credit and financial crisis is far from over.
In addition, since all but a few of Bashas' stores are in Arizona, it doesn't have a significant presence in other states, like all the others do, that can offset its Arizona business. In other words, all of Bashas' food retailing eggs are basically in the Arizona basket, even though it is a multi-format operator in the state, which is a plus for the retailer despite its problems.
More will give, and more shoes will fall, in the Arizona market. The competition continues to heat up. The economy is far from improving as of yet in the state. And population growth, which has been the key to Arizona's, particularly the Phoenix Metro region's, pre-recession booming economy, is pretty much at a standstill.
Linkage - Select Related Posts:
>December 16, 2008: Food & Grocery Retailing in the Recession: Bashas' Broadening the Shopper-Base in its Hispanic Format Food City Stores; Shoppers Search for Value
>February 6, 2009: Arizona Market Region Analysis: Bashas' Worker Layoffs, Closing of Stores Could be the 'Canary in the Coal Mine' in Ultra-Competitive Arizona Market
>February 3, 2009: Competitor News: 'Grocer-Gone-Wild:' Arizona's Fry's and its 'Bring it On' 'Take All Competitors' (Including Tesco's Fresh & Easy) Store Coupon Move
>December 12, 2008: Fresh & Easy Looking For Gold in Gilbert: Second Store in the Arizona City Set to Open Jan. 7; A Third Fresh & Easy Market to Open In Fall, 2009
>December 12, 2008: Marketing & Promotions Report: Manufacturers' Coupons Becoming the 'New Black;' Use Among Consumers Soaring; Marketers Distributing More Than Before
>October 2, 2008: Arizona Market Report: Fresh & Easy Opens Two New Stores; Marketside Opens in Three Days; Analysis of One Of the Most Competitive Markets in the U.S.
>June 8, 2008: Arizona Region Market Report: First Signs of A Weakening Might Be Starting to Show in the 'White-Hot,' 'Super-Competitive' Arizona Market
>April 9, 2008: Arizona's Shopper and Employee-Beloved Bashas' Named One of 'The Best' Places to Work in the State For Second Year in a Row
[Follow Fresh & Easy Buzz around on Twitter.com at www.twitter.com/freshneasybuzz.]
Arizona's family-owned Bashas' Markets supermarket chain announced today it plans to close additional stores in the state, along with laying off more employees.
Through its spokesperson Kristi Nied the 160-store hometown Bashas' chain said it will close five to ten underperforming stores in Arizona under its flagship Bashas' banner and its Food City Latino format banner. Three or more of the stores will be in the Metropolitan Phoenix region where Tesco's Fresh & Easy has 30 of its small-format, Fresh & Easy grocery and fresh foods markets.
Bashas' also says it will eliminate about 700 jobs. The number of layoffs could exceed the 700 by at least a couple more hundred if Bashas' ends up closing close to or the full 10 stores, a source in a position to know told us today.
The 700 eliminated jobs comes on the heels of the grocery chain laying off about 350 employees in late January of this year, as we reported and wrote about in this February 6, 2009 news and analysis piece: Arizona Market Region Analysis: Bashas' Worker Layoffs, Closing of Stores Could be the 'Canary in the Coal Mine' in Ultra-Competitive Arizona Market.
Additionally, in the summer of 2008, Bashas' laid off about 250 employees in what then was its very first round of worker firings, which it attributed to the severity of the economic recession in Arizona, along with the intense competition in the food and grocery retailing sector in the state. [June 8, 2008: June 8, 2008: Arizona Region Market Report: First Signs of A Weakening Might Be Starting to Show in the 'White-Hot,' 'Super-Competitive' Arizona Market.]
As we wrote about in this April 1, 2009 story [Competitor News: Bashas' Chain Launching 10,000-Plus Item Storewide Price Slashing Program This Week in its Arizona Supermarkets], Bashas' fired a competitive salvo in its home market of Arizona by slashing the prices on over 10,000 items in its 150-plus stores in the state.
Bashas' operates 150-plus stores in Arizona, where it is headquartered, under its flagship Bashas' banner (the majority of stores); Food City, its Latino-focused format banner; A.J.'s Fine Foods, an upscale and specialty banner; Eddie's Country Store; and Bashas' Dine (prepared foods focus). Bashas' also operates a small chain of liquor stores in Arizona called Sportsman's Fine Wine & Spirits.
The firing of the 700 employees announced today by Bashas' is its third since the summer of 2008. It appears that competition is such for the grocer that in addition to launching is price-slashing and promotional program just a few weeks ago, it still needs to cut costs on the expense side of the ledger, closing the five to 10 stores and laying off the 700 employees.
Since Fresh & Easy Buzz was saying nearly a year ago, like in this story, [June 8, 2008: Arizona Region Market Report: First Signs of A Weakening Might Be Starting to Show in the 'White-Hot,' 'Super-Competitive' Arizona Market], that something would have to give among one or more chains in Arizona in terms of what we call the white hot competitive food and grocery market in the state, coupled with the recession and housing foreclosure crisis, both which have hit the state particularly hard, we aren't surprised Bashas' is closing additional stores and laying off more employees. Although the 700 employees is more than we anticipated, on top of the about 500 already let go since the summer of 2008.
Unlike Wal-Mart, Safeway, Kroger's Fry's, and even Tesco's Fresh & Easy, all players in the Arizona market and all owned by public companies that are among the largest retailers in the world, Bashas' is a privately-held company that has all but just a few of its stores in Arizona. As a result, it doesn't have the kind of capital these publicly-held mega-retailers do to buffer it in the current super-competitive and economically-challenged climate in Arizona, particularly since the credit and financial crisis is far from over.
In addition, since all but a few of Bashas' stores are in Arizona, it doesn't have a significant presence in other states, like all the others do, that can offset its Arizona business. In other words, all of Bashas' food retailing eggs are basically in the Arizona basket, even though it is a multi-format operator in the state, which is a plus for the retailer despite its problems.
More will give, and more shoes will fall, in the Arizona market. The competition continues to heat up. The economy is far from improving as of yet in the state. And population growth, which has been the key to Arizona's, particularly the Phoenix Metro region's, pre-recession booming economy, is pretty much at a standstill.
Linkage - Select Related Posts:
>December 16, 2008: Food & Grocery Retailing in the Recession: Bashas' Broadening the Shopper-Base in its Hispanic Format Food City Stores; Shoppers Search for Value
>February 6, 2009: Arizona Market Region Analysis: Bashas' Worker Layoffs, Closing of Stores Could be the 'Canary in the Coal Mine' in Ultra-Competitive Arizona Market
>February 3, 2009: Competitor News: 'Grocer-Gone-Wild:' Arizona's Fry's and its 'Bring it On' 'Take All Competitors' (Including Tesco's Fresh & Easy) Store Coupon Move
>December 12, 2008: Fresh & Easy Looking For Gold in Gilbert: Second Store in the Arizona City Set to Open Jan. 7; A Third Fresh & Easy Market to Open In Fall, 2009
>December 12, 2008: Marketing & Promotions Report: Manufacturers' Coupons Becoming the 'New Black;' Use Among Consumers Soaring; Marketers Distributing More Than Before
>October 2, 2008: Arizona Market Report: Fresh & Easy Opens Two New Stores; Marketside Opens in Three Days; Analysis of One Of the Most Competitive Markets in the U.S.
>June 8, 2008: Arizona Region Market Report: First Signs of A Weakening Might Be Starting to Show in the 'White-Hot,' 'Super-Competitive' Arizona Market
>April 9, 2008: Arizona's Shopper and Employee-Beloved Bashas' Named One of 'The Best' Places to Work in the State For Second Year in a Row
[Follow Fresh & Easy Buzz around on Twitter.com at www.twitter.com/freshneasybuzz.]
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