Why Haggen grocery chain thinks it will be a hit with shoppers in Southern Nevada

By Brian Deka

Friday, May 29, 2015 | 2 a.m.

A growing name in the grocery game is coming to Southern Nevada next month.

Haggen Inc. recently bought seven Vons and Albertsons stores in the area and will convert them to the Haggen Food & Pharmacy brand in the next few weeks.

Nevada shoppers might not be familiar with the Bellingham, Wash.-based chain, which was founded in 1933. Haggen says it intends to be a one-stop shop focusing on fresh, locally sourced products alongside big brands.

Last year, Albertsons and Safeway announced plans to merge and had to sell some of their stores to meet anti-monopoly requirements. Haggen agreed to buy 146 stores, increasing its number of locations from 18 to 164 and its employee count from about 2,000 to about 10,000.

The chain, which already had stores in Washington and Oregon, gained a presence in Nevada, California and Arizona with the purchase.

The conversions at the stores in Las Vegas, Henderson and Boulder City will begin June 7. Employees at the Vons and Albertsons stores will have the opportunity to stay on board as Haggen workers.

Among the changes Haggen says it’s making at the stores during the 40-hour conversion process are introducing a larger variety of organic produce; adding higher-quality meats and seafood; improving service-deli products, such as healthier, house-made salads and preservative-free meats; and revamping the bakeries to add fresh-baked items such as cinnamon rolls and grab-and-go breakfast sandwiches.

Haggen’s purchase of 146 stores represents growth of more than 800 percent. It’s quite a turnaround for the company, which has closed 12 stores since private investment firm Comvest Group took a majority interest in 2011.

To improve the company’s outlook, Comvest needed to close stores that weren't performing, Haggen Pacific Northwest CEO John Clougher told the Puget Sound Business Journal in December.

The Sun spoke with Haggen Pacific Southwest CEO Bill Shaner about the company, partnering with local farmers and producers, Haggen’s prices and what makes the chain different from other grocers. His responses have been edited for length and clarity.

Why is Southern Nevada a component of Haggen’s expansion?

In order to obtain Federal Trade Commission approval of their merger, Albertsons and Safeway agreed to divest 168 stores in eight states — 111 from Albertsons and 57 from Safeway — and agreed to settlements with attorneys general in California, Nevada and Washington. Haggen purchased 146 of those divested stores, including seven in Nevada. We’re thrilled for the opportunity to make a name and home for ourselves in Nevada!

How does Haggen plan to introduce itself to customers who might not be familiar with the chain?

We initially spread the word through direct mailers and weekly ads to our new neighbors in the stores we’re converting. Beyond that, we maintain an active presence on our social channels (Facebook, Twitter and Instagram). As we gain critical masses in counties, we plan to launch larger-scale marketing campaigns. We also use the in-store experience to share the Haggen story with our customers, from in-store signage, local producer profiles, interactions with team members and so on, as well as the relationships our store teams have already developed in the community with local businesses, nonprofit organizations and leaders.

What can Haggen offer Southern Nevada shoppers that other grocery stores don’t?

At Haggen, our goal is to provide a unique, hassle-free shopping experience. We offer essential items guests need, specialty items guests want, and local items that reflect the community — all at fair, competitive prices. We’re a full-line grocery store with a bias toward fresh, quality, organic, local and healthy options so that guests can do all their shopping with us instead of traveling to multiple stores. Overall, we’re excited about the changes we’re making to enhance our stores, although there’s only so much we can accomplish in the 40 hours we’re closed. It will take time to completely infuse the store with the full Haggen experience. We make certain immediate changes with our opening — branding and décor changes, as well as enhanced offerings in our fresh departments such as produce, meat/seafood, bakery and service deli. But it is a journey, as we like to say, so guests can expect to see continued improvements over the upcoming weeks, months and year.

Haggen touts its customer service; how is it different than at other grocery stores?

We create heartwarming experiences and pleasant surprises through genuine and friendly service. Foodies at heart, we are passionate about providing our guests with knowledgeable and helpful service. Our goal is to exceed all of our guests’ expectations by providing full service in every department in a prompt, professional manner. We want Haggen shoppers to feel inspired at the grocery store.

What challenges will Haggen face in connecting with local farms and producers in Southern Nevada? Are there enough local sources to fill Haggen’s need for products?

We’re in the process of negotiating with local farms and producers, and are looking to partner with a wide range of Nevada suppliers. We’ve partnered with Unified Grocers as our main supplier in California, Arizona and Nevada. We also leverage our size to maintain and create relationships with vendors to get high-quality products at competitive prices. Also, our geographic footprint across California, Arizona and Nevada puts us at an advantage for getting the freshest, high-quality perishables onto our shelves in a timely manner.

How will Haggen’s prices compare with those of other chains in Southern Nevada?

We do regular price checks against competitors to make sure our prices are fair and reasonable, and if you compare the same items at our store and other grocery stores, we think you’ll find that we’re within a few cents of each other (sometimes under and sometimes over, depending on the product).

How does Haggen balance organics and local sourcing with a desire to keep prices on par with those of Albertsons and Vons?

We don’t believe these are mutually exclusive. We can leverage our size, geographic footprint and experience to maintain and create relationships with vendors to get high-quality, locally sourced products (as well as big-name brands) at competitive prices.

How are Haggen’s offerings different from those of upscale grocers such as Trader Joe’s, Sprouts and Whole Foods?

We’re quite different from these upscale grocers in that we are a full-line grocery store. Haggen offers shoppers everything they need under one roof — the essential, everyday items they’re used to finding at conventional stores like Vons or Albertsons, specialty items they want from grocers like Whole Foods or Trader Joe’s, along with locally relevant items that reflect the community.

How similar is Haggen's strategy to Target's new approach, which has been described as Whole Foods with more affordable prices? Is the Target strategy a source of concern for Haggen?

We’re focused on our own strategy and launching the best grocery stores we can to meet the needs of the neighborhoods we serve.

Are the recent closures of multiple Food 4 Less and Fresh & Easy stores in the Las Vegas Valley cause for concern at Haggen as it takes over stores in the area?

No disrespect to Food 4 Less or Fresh & Easy, but we’re not them. We’re certainly aware of the competitive pressures ahead of us, but Haggen is a brand and a business that has stood the test of time, serving guests for more than 80 years. By focusing on fresh, locally sourced products alongside everyday big brands, we provide guests a relief from the normal hassle of grocery shopping. Nowadays, consumers desire healthier, hassle-free living, which is exactly what Haggen will provide.

What has changed for Haggen since the recession and Comvest Group’s purchase of a controlling interest in the company in 2011?

Since private investment firm Comvest Group took a majority interest in the chain in 2011, Haggen has experienced significant improvement in the business. Comvest offers financial and strategic support, and they’re a large reason we believe we can be successful.

Is there a point when a market becomes oversaturated with grocery stores?

Grocery is certainly a competitive space, but we welcome the competition — it just makes us better. With our unique offering, we think our market position is unique in Southern Nevada, positioned as we are between conventional retailers and the super-premium natural and organic retailers.

How smoothly has the conversion and rebranding process gone in California?

Conversions have been going well. We’re on schedule to complete 100 openings in 100 days across our Southwest division (which includes Southern California, Arizona and Nevada). This is close to our original completion target of mid-June.