By Shan Li
August 14, 2015
Haggen Inc., the grocery chain that has struggled since rapidly expanding this year, is closing 27 stores, including 16 supermarkets in California.
The Pacific Northwest company said most of the locations slated for closure or sale are among the 146 Albertsons, Vons, Pavilions and Safeway stores it purchased this year. Haggen has spent the last few months converting those stores to the Haggen brand.
A company spokeswoman declined to disclose how many employees will be affected.
Haggen, which touts its fresh produce and meats, is struggling in California. The chain said it will be closing 16 supermarkets in the state. (Mel Melcon / Los Angeles Times)
Haggen raised eyebrows last year after winning a bid to buy the stores, which the Federal Trade Commission had ordered sold as part of the merger of Albertsons and Safeway.
In a single move, the company went from an 18-store chain in Oregon and Washington to operating more than 160 spots down the West Coast, including 83 in California.
“They bit off a lot, and obviously it was a little more than they could chew,” said Jim Prevor, a food analyst and founder of PerishablePundit.com. “The losses must be very severe for them to move this quickly.”
Haggen came in at a time of heightened competition in the Southern California grocery industry.
Online players such as Amazon.com and Google are getting into food delivery. More specialized chains such as Trader Joe’s and big-box stores such as Wal-Mart also are upping their food offerings. German discount grocery chain Aldi recently announced plans to open 45 Southland stores starting in March.
In a land thick with rivals, Haggen has failed to entice consumers, analysts said.
Shoppers have complained that its shops charge higher prices for the same quality products as the supermarkets they replaced.
When its first California stores opened in March, about 1,000 items — or about 2.5% of a store’s products — were erroneously overpriced at 10 supermarkets in Los Angeles, Orange and San Diego counties.
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