Albertson’s to Exit Tennessee and Texas Markets
Albertson’s, Inc., intends to completely exit four under-performing markets — Memphis and Nashville, Tenn., and Houston and San Antonio, Texas.
“Exiting these under-performing markets finalizes another major chapter in
the restructuring of our company,” stated Larry Johnston, chairman and chief
executive officer. “This will now allow us to focus resources on strategic markets
that build shareholder value and offer opportunity for significant future growth.”
These market exits will occur through a combination of store closures and store
sales. Combined, the markets represent about $1.3 billion in annual revenues
but as a group they fail to meet or exceed the Company’s defined return on invested
capital hurdle rate. Division offices, located in Memphis, Houston and San Antonio
will also be closing.
Moderator Comment: Was exiting these markets a good
move for Albertson’s? Who benefits most from this decision?
Albertson’s management clearly thinks that it had too
far to climb to make major in-roads in these markets. Whether the chain can
now use the resources previously dedicated here to drive share and expand territory
from markets it is stronger in will be the true test. [George
Anderson – Moderator]