Albertsons sues Haggen

July 22, 2015

Haggen 2Supermarket giant Albertsons is suing grocery chain Haggen, alleging the company failed to pay for more than $36 million for merchandise that was included in a recent sale of 146 stores. [LA Times]

Haggen, a Washington-based company, purchased 146 Albertsons, Vons, Pavilions and Safeway stores. Eighty-three of the stores are located in California, and several of them are on the Central Coast.

The lawsuit alleges Haggen waited until the deals on all 146 stores closed and then notified Albertsons that it would not pay for $36 million of inventory at 32 stores it acquired. The suit, which was filed in federal court in California, does not specify Haggen’s reasons for not paying, but it states the reasons are baseless.

An additional $5 million of payments for merchandise at six stores have come due since the filing of the lawsuit. Haggen allegedly now owes Albertsons more than $41 million.

Haggen says it notified Albertsons in June that the seller had committed multiple violations of the purchase agreement and possible violations of state and federal trade rules. Haggen has not disclosed the alleged violations, though.

Hagen purchased the grocery stores from Albertsons and Safeway after the Federal Trade Commission forced the two companies to sell supermarkets as part of a merger.

Earlier this month, Haggen laid off dozens of Central Coast workers and reduced other employees’ hours from full-time to part-time. Customers have also complained about Haggen significantly increasing grocery prices.

Haggen Southwest CEO Bill Shaner says competitors have launched an unprecedented response to Haggen’s entry into the marketplace.


Loading...

9 Comments

  1. sezlittle1 says:

    I do not understand this. Haggens prices are much lower than California Fresh in Pismo Beach or Whole Foods but people’s panties are in a bunch.

    Good people at Cal Fresh but the highest prices for any grocery store.

    (-3) 9 Total Votes - 3 up - 6 down
  2. BeenThereDoneThat says:

    One thing I heard years ago before I ever even thought of my own business, is that one of the more common failures of business, is when a business grows to fast.

    18 to 146 stores (811%) I think qualifies for this. Like others I think this will be the beginning of the end for them.

    (13) 15 Total Votes - 14 up - 1 down
  3. MaryMalone says:

    And the Haagans dooshbaggery just continues to roll out…

    (9) 15 Total Votes - 12 up - 3 down
  4. bobfromsanluis says:

    This whole affair seems to stink from the get-go; a smallish grocery chain agrees to buy 146 stores, accept the union contracts that are in place for each location, tries to bring in a new look that includes a lot more organic and local products, but is seeming to fail on every possible front.

    This sounds almost like a page out of the vulture capitalist playbook; pay (or at least agree to pay) an above market price for the properties, make all sorts of promises about how the service is going to be great, all the employees jobs are going to be protected, and then proceed to hollow out what is left by screwing every one over as much as possible as quickly as possible. Is Mitt Romney involved in this somehow? (that’s one theory)

    In reading a few of the comments at the link (L.A. Times), another theory suggested is that Albertson’s knew that Haggen would not be able to make this purchase work, and in doing so, they get to eliminate some competition, and once the chain fails, the FTC will allow Albertson’s to re-purchase those same stores (or at least the ones that they really want) at rock bottom bargain prices, eliminate the union protection at those locations, and move forward in a very cut throat manner.

    Either way, this seems to be a colossal failure in the making.

    (7) 31 Total Votes - 19 up - 12 down
  5. flytrap says:

    “….competitors have launched an unprecedented response to Haggen’s entry into the marketplace.” Wow, what a great excuse for losing your customer base by charging wildly over the top prices, while their competition is continuing to charge their usual prices. I wonder what the next spin will be!

    (21) 25 Total Votes - 23 up - 2 down
  6. pandayho says:

    Dumpster fire: the grocery chain sale.

    (14) 16 Total Votes - 15 up - 1 down
  7. dogeatdog says:

    Haggen’s is not doing right by their employees or the union contract they accepted when they bought Albertson’s. Instead of going by seniority in cutting hours or letting people go, they cut everyone hours.

    One employee in Paso went to check her schedule and was told she was not on there, that is how she found out she did not have a job anymore, nice huh!

    Full time employees went from 40 hrs to 24 hrs how is that for a cut in hours. And then they are told if you get another part time job, we can not guarantee you even 24 hours. No working with employees to help them survive through this crappy transition.

    Haggens can say good bye Hassles all they want in their flyers, but I think they are a major hassle for the people who are just trying to work and pay their bills.

    I hope the employees who are looking for new jobs find them, and Haggen’s can’t find employees to take their places. GOOD BYE HAGGEN’S we don’t want you and your high prices here. You need to treat your employees better.

    (46) 50 Total Votes - 48 up - 2 down
    • sloweb says:

      Ooopsss, should have been more clear. Reduced working hours are the unintended consequences.

      (0) 0 Total Votes - 0 up - 0 down
  8. Black_Copter_Pilot says:

    Hagen can’t pay their debt because they fail to get people in the door. This is an excellent example of “the market has spoken.” This massive failure of expansion will sink the ship called Haggen. A year from now they will be gone.

    (46) 52 Total Votes - 49 up - 3 down

Comments are closed.