The Orange County Register reports that Gelson’s has closed its store in Laguna beach, California, “citing unprofitability and tough economics.”
“The limited population of the area coupled with challenging economic headwinds for grocers in California have unfortunately made this decision necessary,” said John Bagan, Gelson’s president-CEO. “Despite an amazing and dedicated team, Laguna Beach has been unprofitable.”
Local residents – however few of them there are – have seen this movie before.
The Register reports that the unit used to be an Albertsons, until it was divested in 2015 as part of the company’s acquisition of Safeway. The store then became a Haggen store – but that didn’t last long. The Register writes that it went “bust in six months.” Gelson’s took over the location in 2016.
The Register notes that Gelson’s s not abandoning the area – it has a store in Dana Point, just 2.5 miles away.
KC’s View:
Gelson’s gave it almost a decade. That qualifies as a fair shot.
Reading this story, I find myself wondering if over the next few months we’re going to see the name “Haggen” pop up a lot in the news, as regulators and the media revisit the disastrous circumstances surrounding that misbegotten deal within the context of the proposed Kroger-Albertsons merger.
I can remember going to visit a store that had been converted to the Haggen banner in Oregon, just south of Portland and 40 miles of the Willamette Valley wine-growing region. There was an endcap dedicated to “local wines” – and they all were from California.
That’s what happens sometimes when these mergers take place. The big get bigger, but they don’t necessarily get better. And they don’t necessarily serve customers more effectively.
That may not be a good enough reason to veto a deal. But it is a reality.
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