Haggen to eliminate 27 stores, mostly in the Southwest

An undated photo of a Haggen store getting converted to the Northwest Fresh brand.
An undated photo of a Haggen store getting converted to the Northwest Fresh brand. AP

Bellingham-based Haggen is planning to close or sell 27 grocery stores as it works to streamline operations after making a huge acquisition earlier this year.

The grocer is closing 16 stores in California, five in Arizona, five in Oregon and one in Washington, according to a list provided by the company. The lone Washington store impacted by Friday’s announcement is in the Spanaway area of Pierce County. The Oregon stores that will close include two in Klamath Falls and one each in Tulatin, Grants Pass and Keizer.

The company is reducing the number of stores to strengthen its competitive position, said John Clougher, Haggen CEO Pacific Northwest. Nearly all of the stores being closed or sold were acquired as part of the transaction in which Alberstons and Safeway divested 146 stores in order to complete a merger earlier this year. At the time of the sale, Haggen grew from 18 stores to 164 and went from about 2,000 employees to more than 10,000.

“It’s been a tough day for Haggen,” Clougher said in an interview following the announcement on Friday, Aug. 14, adding that the company now has a clearer picture going forward with the remaining stores.

Clougher said after the conversion of the newly acquired stores, company officials took a look at how they were received in different neighborhoods, paying close attention to sales. They then made the decision that some of the stores were just not the right fit.

“It’s upsetting. We want to hire people,” he said.

The biggest hit came in the Southwest region, which is a new and very competitive market for Haggen. In recent weeks, the company has experienced some challenges as it converted more than 100 stores to the Haggen name, resulting in employee layoffs in the Southwest region.

“By making the tough choice to close and sell some stores, we will be able to invest in stores that have the potential to thrive under the Haggen banner,” said Haggen CEO Pacific Southwest Bill Shaner in a news release.

One point Clougher wanted to stress is that nearly all of the 18 stores existing before the acquisition have performed very well of late, particularly the ones in Whatcom County.

“The existing stores are creating a road map for the recently acquired stores,” Clougher said.

The one exception was in Tulatin, where Clougher said the employees fought hard to keep that store going, but a changing grocery environment led to the decision to eliminate that store.

Haggen employees in the Northwest division also have seen reductions in the hours they work, but most of that has revolved around the typical seasonal patterns seen at grocery stores, said Clement Stevens, a senior vice president for the company.

Clougher said they will continue to evaluate each of the stores and continue to make investments in people, products and each of the communities in order to make better connections and become better established. It’s part of the maturation process of a company that took on quite a few more stores and employees, he said.

The stores slated to close or be sold will continue operate for the next 60 days.

Reach Dave Gallagher at 360-715-2269 or dave.gallagher@bellinghamherald.com. Follow him on Twitter at @BhamHeraldBiz and on Facebook at BellinghamHeraldBusiness.