Friday, April 13, 2012

Scolaris closing California Stores!

So, on April 13, 2012, a news article came through showing that Scolari's is closing its 4 California Stores. Citing management challenges due to the stores being "400 miles from Nevada and 120 miles apart geographically" and the economy, the stores were sold to real estate developers and will close within 60 days, and complete layoff of all staff will take place.

Scolari's started out in California 60+ years ago, left the region once selling its stores to Lucky in the 80's and taking the proceeds to purchase an existing regional operation in Nevada and had a fairly good ride growing with the Nevada region in the 90's. In the late 80's, Scolari's re-entered California again and although their California store count got up to the 7 or 8 range at one point, and down as low as 3, it settled out at a count of 4 stores. In the late 90's, Scolari's was second highest bidder for acquisition of Albertson's Las Vegas Stores that were for sale in a government ordered store sale resulting from the Albertson's/Lucky purchase, but lost on that bid to Raley's who bought the stores and proceeded to experience very poor results only to sell the pieces to Smith's by 2004, only after watching marketshare decline by more than 50%. So it is probably fortunate Scolari's did not win the bid for the Las Vegas Albertson's Stores. Still, Scolari's  in the mid 00's entered Las Vegas by gaining the rights to the space that previously housed two Grocery Outlet Stores and proceeded to open two Save a Lot (SuperValu) locations in the market. These stores failed and were closed within a few years.

In my view, in Nevada, Scolari's is struggling. Many of their better stores have been in the line of fire of Wal Mart Supercenter competition that has been less than kind to them. They also have 4 stores in very close proximity to Smith's Stores with significantly lower pricing and as of late better quality and mix.

In late 2008, I visited their 4 California Stores and felt they were in better condition than the Nevada operation. In talking to employees in those stores, I was told the stores were being run by the eldest Scolari while his two sons were running the Nevada Stores. The difference in the stores showed. The California operation seemed clean, neatly stocked, had friendly employees, and appeared to have very much of a hometown feel. The Nevada Stores aren't the cleanest, best stocked places; service varies and they largely have a dead feel. Their price scale, relative to most competition in Nevada, is very high. The stores seem to rely on things like postal services, DMV kiosks, utility payments, slot machines, and other activities that do not pertain to selling groceries in hopes that people will come in and buy some groceries while they are using these other services.

Obviously they cannot compete on price with larger chains. But they could compete on quality, service, and selection. They don't do too well on any of those fronts. While they offer Harris Ranch USDA Choice Beef, the product is often not fresh, meat areas ofter have an odor from the seafood, and pricing is very high. While their delis offer Boar's Head product, there is little promotion, no strong sandwich program, service in their delis isn't the best, and many of their stores are not really in neighborhoods that this product makes sense in. Their produce is very weak, as is their bakery. Selection is very limited, prices are high, product freshness isn't great. They put "gates" up over their liquor aisles after 8:00 at night in most of their stores requiring people to go find assistance from a clerk to obtain alcohol (no other chain in this market locks up its liquor at all).

So what exactly will happen next remains to be seen. I certainly have my predictions. I hope they can at least sell some stores off to other operators that will offer continued employment to employees rather than what they have done with the California operation.

In Nevada, last year, Scolari's discontinued its "Friendship Fund" and "Club Card" programs. In 2010, Scolari's sold its distribution center/headquarters building and started to supply its stores through C&S Wholesale, while retaining a small warehouse space to handle certain products. They also relocated their headquarters into an office complex and as of yet they have no signage on their offices, just decals in the windows.

In 2010, Scolari's closed its Carson City, NV Store. In 2011, Scolari's closed the pharmacy in its Reno-Lemmon Valley Store. Scolari's continues to reduce store operating hours and hours of all service departments on a store by store basis.

 Below is a closer look at the California Stores. These photos were taken in late 2008. The California stores for the most part look a lot different than the Nevada ones... which are fairly consistent in shape/size. If it wasn't for the name, I wouldn't know the stores were even related.

Santa Barbara: 222 N. Milpas
This store is a former Safeway. It is unclear if it was something else between Scolari's and Safeway but I would guess it was. Scolari's gained control of this store in 1988.

 Although not the best exterior photo, this sort of shows the exterior. It is a freestanding building. It doesn't really look like a former Safeway.

The bakery/deli part of the store is the front right corner. 

The produce area was the back right area.

The dairy took a portion of the back wall. Meat (not pictured) took the remainder.

This portion on the left side wall housed lunchmeat. Looking at the back left corner is the seafood area.

This is the front end area.

San Luis Obispo, 1321 Johnson Ave. Opened: 1994.

This would appear to be Scolari's next oldest California store, in San Luis Obispo. It is my understanding that they took a prior retail space and either remodeled significantly or expanded significantly that space in 1994 to build this store. This store looks.. nothing even remotely close...  to how the stores Scolari's built in Nevada in 1992 or the mid to late 1990's look. It resembles them in no way whatsoever. Not in layout, appearance, ceiling type... sign...

The logo on this exterior may be a previous logo but was never used in Nevada.

 Bakery and deli were buried on the left side of the store. No Nevada Store has this layout.

 This is the front wall, this decor, floor, ceiling type, lighting type.. unseen in any of the Nevada Stores.

Pismo Beach, 555 Five Cities Dr. Former Vons. Vons abandoned this site when they purchased the Smith's in nearby Grover Beach. It was probably Williams Bros. prior to Vons.

 This was the right side wall.

 This was the middle of the back wall. Very interesting placement. The bakery was up on the front left wall.
 This was another part of the back wall.
 This was the left side. The produce presentation here varied from Nevada as they were using wood tables while the displays in Nevada are all refrigerated cases.

Paso Robles CA, 2121 Spring Street. Opened 2007. This is actually the newest store in the chain. Their last opening in Nevada was in 2006.

This is actually one of the original Scolari's California Stores. It was sold to Lucky in the 80's and operated as Lucky until 1999 at which time it was sold to Ralphs as a government ordered sale when Albertson's purchased Lucky. Ralphs closed this store in 2006. I am of the understanding this store looked like an older Lucky when it was closed by Ralphs. When Ralphs closed, Scolari's announced since they owned the real estate, they would renovate the facility and re-open the store.

Scolari's performed significant work to this facility. The building seems new. Although the inside of the store does not have the same ceiling, interior colors or appearance as one of their Nevada Stores, the layout of the store is somewhat similar to that of one of the Nevada Stores.

 This is placed on the left right wall, identical to the placement in a Nevada Store.

 This is in the back left corner.

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