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Page 36 — COLORADO REAL ESTATE JOURNAL — July 1-July 14, 2015
Retail
by John Rebchook
Howard Gerelick doesn’t
pull any punches when talking
about the grocery industry.
“I never have,” Gerelick said
after a presentation on the state
of the grocery industry at the
2015 Retail Summit & Expo,
which drew more than 400
people.
“There is no leadership in the
grocery store industry,” Gere-
lick said at the conference on
June 11, which was hosted by
Colorado Real Estate Journal.
“It is all run by last week’s
sales,” said Gerelick, who has
more than 40 years’ experi-
ence in the industry, including
working with Safeway, Kroger
(the parent company of King
Soopers) and Albertsons.
“If last week’s sales were
lousy, forget about getting any
capital” for investments, he
said.
He said the grocery store
business is an extremely vola-
tile business.
Not only are leaders in the
industry confused, but so are
consumers, he said.
For example, a survey of
7,200 people found that Trader
Joe’s is the most preferred gro-
cer by consumers and Walmart
is at the bottom of the ranking.
Yet, people also rank low
prices and one-stop shopping
as important factors and those
are areas in which Walmart
excels, he said.
He is critical of the merger of
Safeway and Alberstons, put
together by Cerberus Capital
Management, which will result
in the closing of nine Albert-
sons stores in the Denver area.
“The recent announcement
of the closings tells me Alber-
stons is in full control” of the
merger, said Gerelick, who is
the co-chairman of the Food
Access Task Force for the city
of Denver.
Albertsons, he said, is more
concerned about individual
store profits than with market
share.
He estimated that those nine
stores that are closing serve
about 300,000 consumers.
Safeway, meanwhile, never
has carved out a clear identity
for itself in the Denver area, he
said.
And the corporate cultures at
Safeway and Albertsons are so
different that it will make for a
bumpy merger, he said.
However, Brian P. Shorter,
the managing director at Sul-
livanHayes Brokerage, speak-
ing on an earlier panel at the
CREJ conference, assessed the
merger differently.
He described the merger as
creating a “sleeping giant,”
which he said “hopefully” will
mean more capital investments
in stores.
The closing of the Alberstons,
he said, “opens up the oppor-
tunity to backfill that space
with the specialty guys. Long-
term, I think people are going
to be surprised by how strong
the Safeway/Albertsons can
be,” Shorter said.
Gerelick said that King Soop-
ers does the best job of any
grocer in the Denver area.
King Soopers, he said, has
increased its market share by
opening stores closer to each
other than Safeway did.
King Soopers, he said, is not
as worried about “cannibaliz-
ing” its own stores as much as
Safeway and Albertsons.
King Soopers, in fact, has
been able to buck a national
trend by not only surviving,
but also competing effectively
against Walmart superstores,
he said.
Gerelick noted during his
career he has worked for 11
CEOs and 23 division presi-
dents.
“None of them have had a
clear understanding” on how
to accomplish their goals, he
said.
“This business is crazy.”
Other News
n H&M plans a 25,000-square-
foot store at Southwest Plaza.
The store will open this fall and
will be the 10th in the state.
The retailer will include a
“store within a store” sec-
tion for accessories and sport
apparel.
It also will also carry H&M’s
children’s collection, from
newborn to 14 yeas. The store
will employ about 40 people.
It also will be a sustainable
store with initiatives for recy-
cling waste, water conserva-
tion, energy-efficient heating,
cooling and lighting systems,
and environmentally responsi-
ble materials, such as certified
wood and fabrics.s
From left, Jay P. Carlson, Front Range Commercial; Brian P. Shorter, SullivanHayes Brokerage; Justin Kliewer, Newmont Grubb Knight Frank; Tony
Pierangeli, SRS Real Estate Partners; and Allen Lampert, David Hicks Lampert.