West Coast regional grocer Haggen announced that it will be closing down 27 stores in the next 60 days as part of its “right-sizing strategy.” Five stores are scheduled for closure in Arizona, 16 in California, five in Oregon and one in Washington.
The news came after the grocer’s rapid expansion this year when it bought 146 stores that regulators required to be sold after Albertsons and Safeways merged. In a statement, the grocer said most of the stores that were due for closure were those that had been acquired from the merger. The company further said that it could close or sell more stores later on.
Bill Shaner, the chief executive officer of Haggen Pacific Southwest, said in a statement, “By making the tough choice to close and sell some stores, we will be able to invest in stores that have the potential to thrive under the Haggen banner.”
Because of the expansion, Haggen grew from only 18 stores in the Pacific Northwest to 164 stores in the West Coast. The number of employees on their roster also grew from 2,000 to 10,000.
However, analysts said the grocer failed to keep up with the competition. A report from the Los Angeles Times quoted food analyst Jim Prevor as saying, “They bit off a lot, and obviously it was a little more than they could chew.”
The grocer is also still reeling from the pricing error it experienced in March when its first stores opened for business in California. About 1,000 items were overpriced in some supermarkets while some were underpriced. The overpriced items, which Haggen management attributed to a glitch, constituted about 2.5 percent of the total products carried by the stores.
Haggen did not reveal the number of those who will lose their jobs due to the company’s streamlining efforts. However, Shaner and John Clougher, chief executive officer of Haggen Pacific Northwest said, “Looking ahead, we will work hard every single day to earn the trust and business of our guests. We will continue to support community events and donate to schools. We will offer our customers the freshest and most local products we can find and the genuine service they deserve. And we will engage in lively discussions about how we can improve. We will remain actively involved in making our communities even better, and we will stay committed to the values that have always guided Haggen.”