West Coast Grocery Chain Haggen To Close Most Stores After Expansion Gone Wrong

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The purchase of nearly 150 grocery store locations in the Northwest meant to provide consumers with more options in the face of a mega-merger between chains Albertsons and Safeway has come to a rather disastrous end: Haggen Inc. plans to close most of those locations after its quick expansion turned sour and the company filed for bankruptcy.

Haggen, which operates primarily in the Pacific Northwest, announced Thursday that it will close all but 37 stores in Washington and Oregon less than a month after filing a $1 million lawsuit against Albertsons, claiming the larger brand was working to eliminate the competition, the Los Angeles Times reports.

The closures include at least 100 stores in Arizona, Nevada and California.

“Although this has been a difficult process and experience, we will remain concentrated in the Pacific Northwest where we began,” Chief Executive John Clougher tells the L.A. Times.

Troubles began for Haggen when the relatively small chain agreed late last year to acquire 146 Albertsons and Safeway stores in Arizona, California, Nevada, Oregon and Washington.

The company claimed in a lawsuit against Albertsons earlier this month that the rapid expansion from 18 stores to more than 150 put a strain on its operations, leading Haggen to close 26 stores.

Shortly after filing the lawsuit, Haggen filed for bankruptcy. The L.A. Times reports that the company plans to liquidate merchandise and furnishings, but that it has secured financing to keep some stores running.

Analysts tell the L.A. Times that the downfall of Haggen was to be expected, as the company relied too heavily on information from competitors.

“Nobody thought they could pull this off,” David J. Livingston, founder of supermarket research firm DJL Research, said. “This isn’t just David and Goliath. This is David and Goliath and Goliath is handing David a faulty slingshot.”

Grocery chain Haggen is leaving California, Nevada and Arizona [Los Angeles Times]

by Ashlee Kieler via Consumerist