Make us your home page

Publix thinks premium price worth it for Albertsons

Publix Super Markets Inc. agreed to pay top dollar — more than $10-million per store — for about half the remaining Albertsons outlets in Florida, according to an SEC filing.

By agreeing to fork out about $500-million for 49 Albertsons locations, the Lakeland grocer is helping Albertsons owners at Cerberus Capital Management get back almost half the $1.1-billion they paid for 655 Albertsons stores two years ago.

Publix's $500-million acquisition is expected to be completed Sept. 9. Then Publix will start renovations that could take anywhere from a few weeks to 18 months, depending on the condition of the store. Publix plans to reopen all of them as well as virtually all of a dozen duplicate Tampa Bay Publix locations that are as close as across the street.

When the dust settles, the Publix store count would increase in the bay area from 96 to about 118 by the end of 2009, including new and replacement stores already in the pipeline.

Publix, which hopes to add most of Albertsons' 8 percent share of the Tampa Bay retail food market to its current 38 percent share, thinks the premium price is worth it. Publix has used a similar saturation strategy in South Florida, where it now holds more than 60 percent of the market.

"We are always looking for top locations that make us more convenient to our customers," said Maria Brous, Publix spokeswoman. "A lot of negotiation went into this deal."

Publix plans to complete the purchase without taking on debt or slowing its own $352-million annual new store and remodeling effort.

Publix paid a premium partly because, unlike most grocers who lease their stores, Albertsons owns the real estate. But even by that measure Publix paid more to avoid leaving enough good spots on the market to create instant or increased access to the Florida grocery market for big national rivals like Kroger Co., Safeway Inc. or Wal-Mart.

"That's about twice what I expected," said Patrick Berman, who heads the retail practice at Cushman & Wakefield in Tampa. "For $10-million they could buy the real estate and build a new store from the ground up."

Cerberus, a private equity firm that also controls Chrysler, has closed or sold about half of its Albertsons stores in other states since the 2006 purchase. That includes 132 stores in Northern California, 23 in Oklahoma and a warehouse in Fort Worth, Texas. Prices and terms were not disclosed. There will be 44 Albertsons left operating in Florida after the sale to Publix.

Mark Albright can be reached at or 727-893-8252.

Albertsons ads get state scrutiny

Florida Attorney General Bill McCollum opened a deceptive trade practices investigation into Albertsons. The question is whether advertising Albertsons used to promote prices at its Florida stores not being sold made it clear that those prices would not be honored at a liquidator's "inventory blowout" sale staged to clear out the 49 Albertsons being closed.

Without manufacturers rebates or promotional price backing, the liquidator raised prices to Albertsons regular "everyday" prices, then took a discount of about 10 percent of most groceries the first week of the sale. That led many shoppers to complain the store-closing sale prices were not much of a deal. In some cases prices were higher.

Albertsons said the ads made clear which discounts applied to which types of stores — including the three that will remain Albertsons in the Tampa Bay area.

— Mark Albright

Publix thinks premium price worth it for Albertsons 08/07/08 [Last modified: Tuesday, August 12, 2008 2:13pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Pinellas construction licensing board needs to be fixed. But how?

    Local Government

    LARGO –– Everyone agrees that the Pinellas County Construction Licensing Board needs to be reformed. But no one agrees on how to do it.

    Rodney Fischer, former executive director of the Pinellas County Construction Licensing Board Rodney, at a February meeting. His management of the agency was criticized by an inspector general's report. [SCOTT KEELER   |   Times]

  2. New owners take over downtown St. Petersburg's Hofbräuhaus


    ST. PETERSBURG — The downtown German beer-hall Hofbräuhaus St. Petersburg has been bought by a partnership led by former Checkers Drive-In Restaurants president Keith Sirois.

    The Hofbrauhaus, St. Petersburg, located in the former historic Tramor Cafeteria, St. Petersburg, is under new ownership.

  3. Boho Hunter will target fashions in Hyde Park


    Boho Hunter, a boutique based in Miami's Wynwood District, will expand into Tampa with its very first franchise.

    Palma Canaria bags will be among the featured items at Boho Hunter when it opens in October. Photo courtesy of Boho Hunter.
  4. Gallery now bringing useful art to Hyde Park customers


    HYDE PARK — In 1998, Mike and Sue Shapiro opened a gallery in St. Petersburg along Central Ave., with a majority of the space dedicated to Sue's clay studio.

     As Sue Shapiro continued to work on her pottery in St. Petersburg, her retail space grew and her studio shrunk. Now Shapiro's is bringing wares like these to Hyde Park Village. Photo courtesy of Shapiro's.
  5. Appointments at Raymond James Bank and Saint Leo University highlight this week's Tampa Bay business Movers & Shakers



    Raymond James Bank has hired Grace Jackson to serve as executive vice president and chief operating officer. Jackson will oversee all of Raymond James Bank's operational business elements, risk management and strategic planning functions. Kackson joins Raymond James Bank after senior …

    Raymond James Bank has hired Grace Jackson to serve as executive vice president and chief operating officer. [Company handout]