By week's end, some of the San Antonio stores and 10 in Houston will be shuttered. The grocery chain has about 32 stores in San Antonio and the Rio Grande Valley and 43 in the Houston area. Albertsons' 14 Austin stores will remain open.
"It's our intention to sell these stores and we will be negotiating actively to do that," spokeswoman Karen Ramos says of San Antonio. The company already has closed stores in San Antonio and Houston and has them on the auction market. Ramos says Albertsons hopes to sell the stores within months. Some stores will remain open until they are sold. Wednesday's announcement, she confides, triggered inquiries at the company's real estate office at its Boise headquarters.
San Antonio and Houston have been fiercely competitive for grocers and Albertsons was unable to break into the top tier. In San Antonio, hometown H-E-B is dominant with 40 stores and Kroger Inc. is the biggest grocer with 48 stores in Houston. Randall's and H-E-B also are active there. Furthermore, Wal-Mart Stores Inc.'s super store concept is a growing presence in both cities.
"San Antonio is a highly competitive market and we've worked very hard to increase the market share in this market and make it a successful one, but unfortunately our stores have never gained the level of acceptance that we had hoped for," Ramos tells GlobeSt.com.
Chuck Siegel of NAI/Rohde Realty in San Antonio says he's not surprised that Albertsons is leaving South Texas because of the intense competition with H-E-B and Wal-Mart. "It was just a matter of time," he says. And, he adds, the move makes sense for Albertsons. "You've got to concentrate on your strengths and get rid of your weaknesses," he says.
In Houston, Albertsons had already slowed its development, Scott Davis with CB Richard Ellis tells GlobeSt.com. "In terms of that new development market, I don't think it will significantly slow it," he says.
Albertsons entered Houston in 1996 and has built new stores, according to a spokeswoman. Davis says Albertsons has good locations in Houston and they will be pursued heavily by grocers and other retailers. "Those that aren't, well, they'll be joining the list of vacant big boxes," he says. Other retailers leaving Houston altogether or shutting stores in recent months include Kmart and Service Merchandise.
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