It’s not a matter of if, but…when. Haggen Food and Pharmacy will fail and will find itself in bankruptcy soon enough.
Why am I making these bold predictions? It’s simple. They deserved it after their leaders mismanaged the company after expanding from 18 stores to 164 stores (from 2,000 employees to 10,000 (and shrinking))with many of it in the ultra-competitive supermarket business in Southern California.
After remodeling and rebranding 146 once-owned Albertsons/Safeway supermarkets throughout Washington, Oregon, southern California, Nevada and Arizona to Haggen’s own in less than 5 months, Haggen is finding itself in financial troubles. This is due to their high prices. Even their clearance prices aren’t really clearanced at all (see photo above). If they expect to succeed they need to stop these so-called penny clearance sales.
In addition to laying off over 700 workers and many more in the near future, they are being sued by Albertsons/Safeway for over $41 millions for unpaid inventories and fraud.
Other factors that are going to destroy Haggen’s are:
- Branding – Haggen’s is only popular in the Pacific Northwest and has seen success in the area because of it’s location.
- Mismanagement – Haggen’s two CEOs (John Clougher of Pacific Northwest and Bill Shaner of the Pacific Southwest) lack the experience and overall knowledge of running a company that has expanded so fast in a short-amount of time.
- Bad image and reputation for firing many developmentally disabled individuals who worked at the locations for many years.
All the factors above are going to destroy Haggens. They will not be the same again. Below are my predictions:
- Many Haggen’s will close by Thanksgiving and by early 2016, they will be in bankrupt status and certain stores will be sold off to the highest bidders
- Aldi, a German supermarket company, whose plans to open at least 45 stores in the Southern California area by 2016 will be a big benefactor of this firesale.
- Aldi and other supermarket chains will buy Haggen’s stores.
Overall, the biggest losers of Haggen’s stupidity are their employees. Hundreds of families are going to be negatively affected and that’s truly the saddest point of this entire ordeal.