Over expansion by the other national chains created large amounts of debt to be serviced and really destroyed many of those chains. Even when I worked at Skaggs Albertsons/Skaggs Alpha-Beta in 80-82 the margins on food were very slim, the drug side of the store is where the profit was. Many of those companies were public companies as well with the unrealistic expectations of shareholders in a very competivie market sector. The demands of shareholders encouraged more debt to expand and when economic cycles hit these chains were not in a financial position to weather them. The privately held chains seem to have handled the ups and downs and competition better, look at Crest and HEB in Texas as examples of this working. I wish HEB (and their Central Market concept) would expand in this region, that is one of the things we miss about Austin and my dad really liked the store when he came down to visit. We stocked up on some HEB stuff while we were in Midland. King Soupers (the name of the Kroger stores here in the Denver area) are better than Safeway or WMNM but still not HEB.
There is also more competition than just Wal Mart, Walgreen's and CVS (previously Eckerd) also had strategies to add food for the convenience shopper to eliminate the need to stop at the grocery store.
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