Wisdom of Lucky name change questioned

Phil Levine

Wednesday, Nov. 3, 1999 | 10:59 a.m.

The focus groups have spoken and the writing is -- literally -- on the wall: Albertson's is back in town.

With its re-emergence today at 28 former Las Vegas Lucky stores, the nation's second-largest supermarket chain draws a line in the sand challenging others to compete. Still, questions remain as to the wisdom -- and fallout -- of Albertson's merger deal and name selection.

The decision to transform Lucky into Albertson's wasn't made lightly. Company officials say today's name change is the result of careful timing and consideration.

"We didn't change the (Lucky) name when we announced the merger because no decision (about the name) had been made at that time," said Albertson's spokesman Craig Rexroad. "We had to decide if we wanted to switch over (Las Vegas stores) to one name, and if so which name that would be. The focus groups indicated their preference would be to go with the Albertson's brand name."

In addition to the name change, Albertson's is eliminating the Lucky Rewards Card discount program at its Lucky and its 29 Sav-On drugstores in Las Vegas. The Lucky card will be replaced by Albertson's "bonus buy" program touting product discounts for all customers. Lucky supermarkets don't have stand-alone pharmacies, but several stores are located next to Sav-On drugstores.

Rexroad said there was "no master plan" to install a pharmacy in former Lucky locations, although proposed new Albertson's stores may include pharmacies.

Albertson's acquired the Lucky and Sav-On chain following its merger with Lucky's parent American Stores Co. Federal antitrust laws required Albertson's to divest its 19 existing Las Vegas stores; those locations were subsequently purchased by Raley's.

Rexroad said the old Albertson's stores -- as opposed to the Lucky stores -- were sold to Raley's on orders of the Federal Trade Commission.

"They (FTC officials) went through neighborhood by neighborhood deciding which stores had to be sold and to whom," he said. "It wasn't left to Albertson's to make those decisions."

Some industry observers were taken aback by Albertson's regional name selection.

"I was a little surprised to see them decide to go with the Albertson's name," said Matt Bear, retail agent at Colliers International in Las Vegas. "We've been told (in Las Vegas) for years that Lucky was the 'low price leader,' yet they decided to go with the Albertson's name. I think it may take some time to re-educate the public with their new corporate name."

Still, Albertson's Rexroad said the company is convinced the decision to consolidate Las Vegas operations under one name is the right business move.

"You have to ask yourself if Wal-Mart would be as successful today if it operated under five brand names," he said. "We're convinced that marketing all regional stores under the Albertson's name is the right way to go."

A spokeswoman for Smith's Food & Drug Stores, one of Albertson's major competitors in Las Vegas, was sanguine about her company's ability to compete.

"We compete with Albertson's in all our locations," said Smith's Vice President Marsha Gilford. "They're formidable competitors, but we're confident we can maintain and grow our market share in Las Vegas. Their name change won't immediately alter any of our existing plans."

Smith's has 14 supermarkets in metro Las Vegas, and operates 114 stores in eight states.

Despite Albertson's decision to eliminate the Lucky discount card, Gilford said Smith's continues to embrace its "fresh value card program."

"We believe in providing additional value to our loyal customers, and we currently have more than 3 million members enrolled in the program," she said. "We have no immediate plans to change."

Arcadia, Calif.-based Vons, which operates 18 Las Vegas supermarkets, has its own card discount program; newcomer Raley's does not. Vons spokeswoman Debra Lambert said her company views the changes in Las Vegas as a potential opportunity to attract former Lucky customers.

"I think there will be a lot of confusion among Lucky customers, and we would welcome them with open arms," she said. "Also, we've offered our Vons club card for more than 10 years and it's been very successful for us. We plan to continue on with that program."

Raley's spokeswoman Carolyn White declined to comment on Albertson's announced changes.

Re-establishing its Las Vegas presence may prove to be a challenge for Albertson's. In the wake of the recent supermarket shuffle, many Las Vegas shoppers are scratching their heads about their grocery store options.

Several customers at Lucky's 1200 S. Decatur store Tuesday were bemused -- and confused -- about the new marquee outside their grocery store.

"It's all a bit confusing," said shopper Claire McGrath. "They used to be Albertson's, and then their stores became Raley's. Now, Lucky is changing too. Each store has something to offer, but these days it's hard to tell which is which."

Still, long-time Albertson's customer Marbel Cooper had kind words for both stores.

"I like shopping at both Albertson's and Lucky's," she said. "I've been shopping at Albertson's for about 15 years, but I've gone to both stores depending on what I need and where I am. Changing the (Lucky) name on the stores probably won't have any affect on how I shop."