Raley’s completes acquisition of Bashas and forms new business venture

UPDATE: December 16, 2021: Raley’s said Wednesday it had completed its acquisition of Arizona-based Bashas earlier this week, closing the deal it announced in October. To manage the combined companies, the grocer has created a new entity called The Raley’s Companies which will oversee the Raley’s and Bashas operating divisions.

Keith Knopf leads The Raley’s Companies as President and CEO while Edward “Trey” Basha is President of Bashas’. Raley’s operating division will appoint a president next month, according to a press release Wednesday.

As part of the announcement, Raley’s said it will give all eligible retail and distribution employees in its divisions a pay raise in early 2022.

Diving Brief:

  • Raley’s has signed a definitive agreement to acquire the Bashas family of stores, according to a press release Friday. Financial terms of the deal were not disclosed.
  • Bashas’ will continue to operate its existing banners under the Raley’s business and will retain its headquarters, more than 100 stores and distribution center in Arizona. The companies expect the transaction to close by the end of this year.
  • The companies combined under Raley’s will operate more than 200 stores in Northern California, Arizona, New Mexico and parts of Nevada.

Overview of the dive:

By acquiring Bashas’, Raley’s nearly doubles its store footprint and takes control of one of Arizona’s leading grocers as it seeks greater economies of scale.

Friday’s announcement noted that Raley’s will not be closing any Bashas stores and that employees will retain their current roles, compensation and benefits. He also noted that Raley’s will not be making changes to local store management, but did not outline plans for leadership roles at the chain – leaving the door open for the California-based grocer to make changes. top adjustments.

In a video presentation released Friday to Bashas workers, Edward “Trey” Basha, President and CEO of Bashas, ​​along with Keith Knopf, President and CEO of Raley’s Holding Company, shared news of the acquisition and assured them that local operations would remain unchanged.

“At Raley’s, we will have a partner who will ensure that we continue to deliver exceptional experiences for our customers and members at a time when competition from regional grocery stores has never been fiercer – while remaining true to the values who have shaped our history over 90 years,” Basha said in the announcement.

Knopf, meanwhile, noted in a statement that “robust digital capabilities and combined buying power” will benefit buyers from both companies.

Smaller regional grocery chains are struggling to compete with the scale advantages that larger chains enjoy in pricing, digital services and other areas. But the cash injection brought by the pandemic presents an opportunity for regional retailers to acquire other operators. In February, Tops Markets and Price Chopper/Market 32 ​​agreed to merge and create a combined chain operating nearly 300 stores in six northeastern states.

Over the past several years, Raley’s has worked to differentiate its stores with a greater emphasis on health, specialty products and in-store experiences. In Arizona, Bashas competes with Kroger-owned Fry’s, as well as growing specialty chain Sprouts Farmers Markets, as well as discount retailers Aldi and Walmart.

Basha’ operates more than 100 stores, including the Food City banners, AJ Fine Foods and Eddie’s Country Store, as well as the Basha’ Having dinner supermarket that serves Native American communities. by Raley operates 124 stores, primarily in Northern California, through four different banners: by RaleyNob Hill Foods, Bel Air and by Raley A market.