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Haggen Meltdown Creates Grocery Monopoly In Some Northwest Cities

The fast expansion and spectacular meltdown of the Haggen grocery chain has left thousands of people in the Northwest with fewer places to buy their groceries. Safeway even got a monopoly as the only large supermarket in a whole county of eastern Oregon.

Bellingham, Washington-based Haggen bought the former Albertsons store in Baker City, Oregon, along with 145 other supermarkets around the West. Haggen took over last spring.

The Federal Trade Commission had forced Safeway and Albertsons to unload stores to preserve competition following their merger. But the divested stores struggled under the Haggen banner.

Now they've taken down all the signs at Baker City store. All you can see when you peek through the doors are bare shelves and empty freezer cases. The only remaining full service grocery store in the whole county is a packed Safeway across the street.

And shoppers are not happy with the monopoly situation.

‘I saw the prices soaring'

"There are shortages of things because it is one store,” shopper Nathan Rayl said. “A lot of the sale items because there's only one store go quick when everybody pours into one area."

Rayl said that never happened when the 16,000 people of Baker County had at least two supermarkets.

Organic food shopper Rhonda White drives up to two hours away -- all the way to Boise -- more often now to buy her groceries.

"You could go to a little town across the Idaho border and the groceries will be way cheaper than here,” she said. "I'm a comparative shopper. I know the price of everything in my basket. I saw the prices soaring when Haggen came in."

In Oregon and Washington state alone, close to 1,000 grocery workers lost their jobs this fall after the Haggen chain declared bankruptcy and put nearly all its newly-acquired stores up for auction.

Dawn Light of Baker City is one of the unemployed workers.

"They thought that by making Albertsons sell to Haggen, they thought it would make things better,” she said. “And in fact, it has made things so much worse."

Light said she's done with the grocery business and is not going to wait to see if the store where she worked reopens.

A ‘distressing’ lack of competition

In November, the combined Albertsons/Safeway bought back 13 of its former stores in Oregon and Washington from Haggen at a fraction of the price they sold for less than a year ago. That includes the Baker City location and shuttered stores in some other places which have monopoly or duopoly situations at present - such as Ashland, Oregon, and Gig Harbor, Washington.

"It's my understanding the FTC said that the only thing worse than two stores in a monopoly, the only thing worse than that is one store,” Baker City shopping center landlord Greg Sackos said. “So they're going to open it back up."

A Federal Trade Commission spokeswoman confirmed via email that the agency did not object to Albertsons buying back some of the stores it was forced to sell in cases where no one else bid at the bankruptcy auction.

But Sackos said the lack of competition is distressing.

"It's a disaster,” he said. “It's a total wreck."

Back-and-forth accusations

Sackos said he's owed over $20,000 in delinquent rent. He believes Haggen and its Florida-based private equity owners did some underhanded deals and has asked the Justice Department to investigate.

"This started out as a financial play in some form,” Sackos said. “Time will tell when the dust settles just who profited by this."

Recriminations are flying in multiple directions. Haggen and Boise-based Albertsons accuse each other in federal lawsuits of dirty dealing in various forms. Neither company would agree to make any executives available for interviews.

Haggen continues to operate 33 of what it calls its "core" stores in Western Washington and Western Oregon. Those will be offered at auction on February 5.

Albertsons, Inc. reacquired this former Safeway store in Ashland, Oregon from Haggen, but there are as yet no signs it will reopen under its former flag.
Liam Moriarty / JPR
Albertsons, Inc. reacquired this former Safeway store in Ashland, Oregon from Haggen, but there are as yet no signs it will reopen under its former flag.

Copyright 2016 Northwest News Network