Morgan Hill – In a cost-cutting move, the investment group that bought 661 Albertsons grocery stores this month is closing 37 stores in Northern California and Nevada – including Morgan Hill’s store.
The stores have been struggling to make a profit for more than two years, said Quyen Ha, Albertsons Northern California division spokeswoman.
Out of the 168 stores in Northern California, the 37 on the chopping block only accounted for 12.4 percent of the division’s profits.
The Monterey Road’s Albertsons store employs more than 35 workers and has been an Albertsons operation since 1971. Before that, an Alpha Beta occupied the spot. It will close its doors in early August.
“It’s sad,” said one employee who asked to remain anonymous, adding that store policy prohibits workers from talking to the press. “But we’ve seen this coming for a while.”
Asked what would happen to the store’s employees, Ha said the company would “actively work to place associates at nearby stores,” such as the San Jose location on Bernal Road.
“Because they are unionized,” Ha said, “they’ll be able to utilize their seniority to bump others in line.”
David Detmers, 47, a longtime Morgan Hill resident, said: “We think it’s unfortunate any time a store closes because it reduces consumer choice and affects the community in terms of loss of jobs and reduced competition.”
Morgan Hill City Councilman Steve Tate said losing Albertsons could provide an opportunity to enhance business on Monterey Road with assistance from the city’s Redevelopment Agency.
“Obviously that’s an important parcel,” Tate said. “It’s the entrance to the heart of downtown.”
Tate suggested the city might revisit economic strategies on that part of town completed last year.
On June 2, Albertsons Inc. – a publicly held company of 2,500 stores nationwide – split into three parts in a $17.4 billion deal. Cerberus Capital Management, LP, aquired 661 stores, including the Northern California division. Supervalue and drugstore chain CVS also aquired stores including Albertsons, Super Saver, Osco and Sav-On stores.
The closures are part of 100 closures nationwide. They are not directly linked to the Cerberus deal, but rather to a change in management style under the new ownership.
“We have a lot more autonomy now,” Ha said, alluding to how decision-making power has shifted to regional divisions.
Partnering with Ceberus are Kimco Realty, Schottenstein Stores Corp., Lubert-Adler Partners and Klaff Realty, LP, on the Albertsons deal.
The Morgan Hill Albertsons closure is one of 12 grocery stores closing in Santa Clara County.
Morgan Hill resident John Jarvis was unmoved. “I don’t care,” he said. “I don’t shop there. The quality isn’t that good.”
