Monday, July 11, 2016

The Aftermath of Seessel's


Sounds like trouble, doesn’t it? In addition to the headline – which definitely doesn’t do the situation any favors – reading further reveals that this is the second time the Memphis-based chain is changing hands in a little more than a year.

Things weren’t always like this.

For years, Seessel’s ran with widespread community support; with a history dating back to 1858, the family-owned operation was the leading independent grocery store chain in the Memphis area as the year 2000 neared. It also had the second largest market share of any grocery store in the Memphis area by that time, and catered to upscale and gourmet customers, but with an unmatched loyalty from the majority of locals.

1923 Model-T used by Seessel's, seen 2014 in the Pink Palace Museum. Courtesy flickr

The great-great-grandsons of the original founder sold the company in 1987, but bought it back a year later due to poor management. Then, in December 1996, the Seessel’s ten-store portfolio was sold to Bruno’s for $62 million.

This sounds like a story of acute attentiveness: Art and Jerry Seessel, no longer interested in running the family grocery business, sold the chain, but, realizing it could fail, bought it back so that they could sell it to a more fit buyer, one better positioned to rise to the task of running Seessel’s. Unfortunately, while the first part may be true, the second proved opposite. Bruno’s bought the chain while concurrently dealing with an accumulation of debt. Inevitably, Bruno’s found itself needing to shed the new stores not long after buying them – in January 1998, in fact, barely one full year later.

Albertsons, a national supermarket chain based out of Boise, took the bait, paying $88 million for the ten stores, as well as the central bakery and commissary that supplied them. Internal corporate executives considered the deal “a significant market entry opportunity for Albertsons [that] accelerates our entry into that marketplace by several years.” Albertsons, already planning three area stores, had now taken ownership of ten, complete with established locations and customer bases; not only did this look good for the immediate prospects post-purchase, it also painted a bright picture for future, organic expansion within the market.

Albertsons company logos, including that of Seessel's, on an old recycling bin, seen 2011 in Lake Charles, LA. Courtesy flickr

The grocery giant took a more quiet approach in regards to naming their new stores, simply adding a byline – dubbing them “Seessel’s by Albertsons” – and rolling them into their southeast division; other stores purchased in the region outside of the ten Seessel’s stores, as well as multiple new builds, allowed Albertsons to operate under their own name. Soon, Albertsons gained enough of a presence in the area to establish a regional office in Memphis as a part of the chain’s corporate hierarchy. Armed with a concept introduced the same year in their Texas stores, Albertsons set out to deliver to their Mid-South customers, Seessel’s and otherwise, the ultimate in convenience:

“Themed destination areas throughout the store denote such areas as Snack Central, Beverage Boulevard, Party Central, Pet Care Center and International Deli, where 73 varieties of cheese are offered. A wharf motif overlooks the Butcher Block and Fresh Seafood site, where shoppers may have purchases steamed for free or marinated and seasoned while they shop. Customers can request a prescription at one pharmacy window and pick up the completed order later at another window facing the central part of the store. … [T]he store’s Meal Center…will offer traditional deli items along with such ready-to-eat entrees as prime rib. … ‘The produce department offers all the best fruits and vegetables. Plus a lot of what we call Quick Fixin’ Ideas will be displayed throughout the store every day for quick, fast meals.’ … Store aisles will incorporate coolers to place cold pasta, puddings, pickles, beverages and salad dressings beside their warm counterparts.”

An example of the over-the-top décor package (Grocery Palace, or Theme Park) Albertsons used in the Mid-South, seen 2007 in Winter Park, FL. Courtesy

Though this excerpt is from an article noting the opening of an Albertsons store in Tupelo in 2000, the features described are fairly typical of what was being implemented in all of their Mid-South stores. In addition to all of the above, Albertsons and Seessel’s by Albertsons stores incorporated bank branches, flower shops, photo centers, video stores, fuel stations, even Starbucks kiosks. Albertsons began to renovate existing Seessel’s stores as soon as they owned the brand, and continued to expand within the market, with as many as six stores under construction – and two in the planning stages – at one point during their tenure in the Mid-South. They built a new store in Horn Lake, the first in the region to feature both garden and promotional centers; they purchased three Jitney Jungle stores in Memphis as a result of that company’s bankruptcy, reopening them under the Seessel’s banner; they constructed a new store only a mile away from an existing one, directing customers to the former as they performed an extensive renovation on the latter, fashioning it into a Broadway-market style store unlike any of their other Mid-South locations.

That store that underwent the Broadway-market remodel was located at 576 S. Perkins Road in Memphis – a favorite of the blog. It closed for construction on October 25, 1999, and reopened sometime second-quarter 2000. That means it, compared to the rest of Albertsons’ Mid-South fleet of stores, likely had even less time open under the chain’s management.

A retail analyst noted in 2002, “When Albertsons bought Seessel’s in Memphis, it looked like such a steal, but a lot of the stores were beyond saving.” A customer’s opinion, written on a forum in 2009, is that “the years of ownership under cash strapped Bruno’s and a heavily leveraged Albertson’s had allowed food quality to slip and service levels were cut.” Whichever is the truth, it’s clear Albertsons was not experiencing positive enough results to match their efforts, and perhaps even was not putting in extensive enough efforts underneath their grandiose façade.

Albertsons opened the aforementioned Tupelo store in April 2000, only to close it and sell it to Kroger in January 2002. Similar stories played out across all of their ground-up stores throughout the Mid-South. Finally, on March 13, 2002, with only the Seessel’s branded stores remaining in their portfolio, Albertsons announced it would be completely exiting the Mid-South: a new headline was published which read, “Albertson’s saying good-bye to Memphis; closing, selling Seessel’s stores.”

Former Seessel's by Albertsons near Riverdale Road in Memphis. Schnucks closed the store in 2003 after entering the market but continued to operate the fuel center out front. Kroger's KwikShop runs the fuel center today, while the store still sits vacant. Image source unknown

The departure was a decision spurred by new corporate management; the Seessel’s divestiture was joined by market retreats from Nashville, San Antonio, and Houston, resulting in considerable job loss and over 150 store closures. Locally, having grown from ten stores in 1998 to as many as 16 at the turn of the millennium, the Seessel’s chain was left with just 12 stores – and no owner – in spring 2002.

All in all, though regarded with mixed reviews, Albertsons led an ambitious – if ill-timed – effort in the Mid-South. Following their lead, Schnucks endeavored to do the same.

Family-owned and based in Saint Louis, Schnucks purchased the 12 Seessel’s stores, as well as 6 Albertsons Express gas stations and convenience stores, on April 30, 2002, for an undisclosed amount of money. Perhaps it was comparable to the $88 million Albertsons had paid for ten stores and zero gas stations four years prior – but at that time, Seessel’s was second in the marketplace; Schnucks, meanwhile, assumed the third place position Albertsons vacated. Nevertheless, they committed, as Albertsons had, to delivering the Seessel’s experience shoppers were used to, but with much more individualized attention, given that “Albertson’s somewhat ignored this marketplace,” per Craig Schnuck himself. From the get-go, however, Schnucks made a critical mistake: they decided to deliver that high-end, upscale Seessel’s experience sans the Seessel’s name.

Removal of Seessel's sign from Midtown Memphis grocery store during Schnucks conversion, likely seen 2002. Courtesy Memphis Photo Blog

Regardless, Schnucks put in an impressive effort, indeed. There’s much to be said on paper: though they closed one of the Albertsons-built stores directly following the purchase, they committed to “immediate renovation and remodeling of all stores” remaining, in what the company considered “Phase I” of a strategic program. “Schnucks Embarks on Second Phase of Memphis Expansion” was the headline in July 2004, as the company detailed plans for multiple new stores to anchor completely new shopping centers, a minor miracle for local economies. Their first ground-up store in the market, located in Collierville, acted as an ideal for the rest of the group, including what was already present and what was to follow:

“The new Collierville Schnucks showcases fruits, vegetables, and other perishables displayed ‘open market’ style in a distinctive format featuring vaulted ceilings and archways. It’s the first of its kind among Schnucks Mid-South stores. … [T]he store includes a full-service florist, an in-store pharmacy, and an in-store bakery specializing in custom cake decorating. The location also features a cold beverage bar, a deli and grill with a separate cash register and seating section, a service seafood department, and a hot- and cold-food and salad bar.”

Schnucks made an effort to invest in the Mid-South, responding to customers’ feedback: for example, they became especially involved in improving the Union Avenue store in Midtown Memphis, the smallest and oldest of the former Seessel’s stores; they quickly remodeled the store’s interior, and began purchasing surrounding parcels of land and probing the community regarding the possibility of building a new, larger store in the site’s vicinity in the future. The chain also adopted the fuel center concept they had entered into with the former Albertsons Express stations, opening fuel centers at their new Mid-South stores as well as introducing and purchasing/converting yet more across their entire corporate footprint.

Interior of Union Avenue (Midtown) store, featuring - similar to the S Perkins Albertsons - a unique décor Schnucks used in none of their other Memphis metro locations, seen January 2016 during final days in operation prior to demolition. Courtesy Downtown Memphis Blog

Again: this all looks great on paper. But in person, it seems Schnucks was not meeting customers’ expectations as well as they had hoped or publicized. While not necessarily their own fault, Schnucks fell victim to the disassociation of “the Seesel’s [sic] name…with an upmarket operation,” suggested an internet user; a managing partner of a local commercial real estate business agreed that “the stores had already lost much of their customers’ loyalty by [2002], and the acquisition didn’t bring them back,” fresh start or not. A separate internet commenter in 2007 concurred: “The local take tends to be, ‘We hate Schnucks, but there is nothing better.’” A retail analyst’s 2004 evaluation of Schnucks’ Mid-South efforts – “Because it is one of the last great family-owned and operated businesses, they understand the heritage of what Art Seessel did in Memphis” – may be true, but understanding and practicing are two different things.

Schnucks abruptly cut its fuel rewards program at its Mid-South stores in August 2011. Soon after, on September 2, 2011, amidst swirling rumors – yet despite corporate denial – Schnucks announced that it would be exiting the Memphis area, selling nine of its stores to dominant market grocer Kroger. Schnucks went on to close the remaining three; Kroger closed one of its new purchases and two of its own existing stores, while keeping all of the Schnucks gas stations and convenience stores and rebranding them as Kwik Shops.

Vestibule of Truse Parkway Schnucks, featuring original Albertsons wood paneling and lettering, seen September 2011 during Schnucks' closeout sale in advance of market exit. Courtesy flickr (visit user's album, too)

For what it’s worth, Schnucks stuck around longer than Albertsons did. They didn’t leave on the most favorable terms, though, especially considering their employees were given little notice and no severance. Said Scott Schnuck, chairman and CEO, in a statement on the departure:

“Despite the best efforts of our talented store teams and a strong customer following, we were unable to gain the strong foothold we had hoped for when we entered the market in 2002. Schnucks competes very favorably in other markets, but in the Mid-South, fierce competition including a growing number of non-traditional grocers and a lingering high price perception was the one-two punch that brought us to today’s announcement.”

The two facets touched upon in that quote – competition and high prices – are rather complex. Starting with the latter: Schnucks entered the market in 2002 pledging to uphold the Seessel’s experience mentioned previously; this meant “shoppers can expect to see high-quality goods and high-end service.” With that, naturally, comes high prices; so, the “lingering high price perception” was somewhat brought upon Schnucks by themselves.

The competition note is another one of interest. The Memphis grocery market has become uniquely competitive, while paradoxically lacking much actual competition. Schnucks cites “non-traditional grocers” – without a doubt, there are many of those, especially now, since Schnucks’ departure: Whole Foods, The Fresh Market, Sprouts, Trader Joe’s, etc. In that sense, the Memphis grocery market is highly competitive. But in the other, more traditional sense of strict grocery stores – not trendy, organic merchants or all-in-one, conglomerate supercenters – Kroger is now the only one left. In fact, Schnucks’ exit was enough for Tennessee Congressman Steve Cohen to petition the Department of Justice to investigate whether the sale to Kroger presented any anti-trust violations. The locally-owned alternatives to these three degrees of national corporations are so numerous and unrelated that there really is no one comparable party large enough to make a dent in Kroger’s near monopoly in Memphis.

Interior (featuring perhaps original Albertsons checklane lights) of the Whitehaven grocery store on Shelby Drive, one of the Schnucks stores Kroger purchased, seen 2013. Courtesy Memphis Daily News

From Kroger’s viewpoint, this is definitely considered a success. An article headlined “How Kroger has gained from rivals’ mismanagement” specifically references the Seessel’s situation; the chain’s Delta Division is approaching a store count of 40 with no viable competitor, and is furthermore launching its Marketplace concept to compete with Walmart and Target. This isn’t to say that Kroger is faceless or attempting to take advantage of Mid-South consumers, though:

Joe Bell, then-manager of marketing and public affairs for Kroger Delta, in 2013 said “the company was ‘surprised and confused’ by negative reaction that followed Kroger’s 2011 acquisition of the area Schnucks chain. He points out that Kroger has been in Memphis since 1928[, and] notes that Kroger was cited for its benevolence by Forbes, that the company does charitable work with women’s health organizations, that they proudly support the Mid-South Food Bank. But… but… many around these parts seemed to take Kroger’s acquisition of Schnucks personally. Bell admits that Kroger’s PR approach was to ‘stay under the radar.’ Now they are taking a new approach with two goals: ‘be more visible, be more accessible,’ says Bell.”

Largely, Kroger has kept to those goals. They have spent $118 million renovating, remodeling, and upgrading their Mid-South stores, and have strengthened bonds with the community. They’re even making good on their promise to build a new Midtown store on Union Avenue – an endeavor Schnucks had toyed with previously, as mentioned earlier, to no avail.

Construction progress on new Midtown/Union Kroger, seen July 2016. Compare to rendering here. Courtesy WMC Action News 5

Still, this doesn’t disguise or make up for the lack of competition; Memphians yearn for other options, specifically Publix, and there’s no need to cite a source for that.

That’s simply the aftermath of Seessel’s.
Although no more than a select few are directly quoted above, all of the articles below not only were used in writing this post, but represent a chronological Internet timeline of the Seessel's history. If you would like a more in-depth look into the chain's past and the events that have led to the present state of the grocery market of Memphis and its surrounding metropolitan area, I encourage you to peruse the links below and investigate further on your own - there's plenty to be found!
Mar 18 2016 -- Let's Go Krogering 2.0
If you're a local and have a Seessel's story of your own to share, please feel free to do so in the comments to this post - your experiences are just as much a part of the history as all those articles! Additionally, if you're interested in more on Albertsons' local operations, check out my special flickr series investigating Albertsons in Mississippi. In the meantime, that's what's happening in the Mid-South, and has been for some time now... until next time, have fun exploring the retail world wherever you are!
Retail Retell


  1. Wow, nice in-depth coverage! I love a good story :)

    1. Thank you! :D Though in my research I discovered there's actually a great deal about Seessel's out there, I felt there wasn't one good spot where it could all be found together. My research for this post sent me on a separate trail to find details about Albertsons' endeavors in Mississippi from around the same time as their Seessel's purchase, and that is completely the opposite in regards to how readily information can be found. It's almost like they didn't exist in MS besides the stores they sold to one chain... which isn't exactly true. I don't wanna divulge much yet, but I've got a special flickr photoset on that coming up next weekend!

  2. The Union Avenue store was closed and demolished in January of this year. Was this the original Seessel's store that first opened in 1941? That was probably the oldest grocery store in Tennessee that Kroger just...closed.

    1. Yep, you're right. Crème de Memph has a post on it here, if you're interested in learning more about the store:

      It's a shame that Kroger closed it, but so goes the industry. For what it's worth, customers seem to really be looking forward to the new store, or at least voiced complaints about the old store enough to warrant that assumption!

  3. While I know nothing about Seessel's, I can tell you put a lot of time and effort into this post. Great work!

    It is interesting to hear Kroger having a near monopoly in Memphis. I found it fascinating that many didn't like the chain yet they still supported it! Most people wouldn't do that.

    I would assume many were upset about Kroger's acquisition since it was basically destroying all remnants of Seessel's being a local landmark. I can understand that. I would guess that the TN governor didn't get anywhere with that proposal since, well, you know.... :D

    I guess Kroger is ready to start invading on department store territory in Memphis now too.

    1. Thank you! :D

      I think many of the opinions on Kroger in Memphis that are online - much like Yelp reviews - are geared more toward the negative, with everyone else who has a positive or (more likely) neutral review staying silent. I have no problem with Kroger, and it's my thinking that most everyone else around here shares the same sort of neutral opinion - they support Kroger because they have no other choice, not because they like or dislike it. I do know that Publix is wanted around here very much. I'm surprised that they haven't come yet, honestly, since it's not every day you have a geographical market begging you to set up shop!

      Lol! In all honesty, though, I think the Seessel's name was trashed by Albertsons, who - while using the name - essentially stripped the chain of everything else it was known for, based on what I've read. That may be partly why Schnucks decided not to reuse the name, and to homogenize the stores once more. Many folks wanted, and still do want, Seessel's back, but they shopped Schnucks not because it honored Seessel's but because it wasn't Kroger. They were mad at Kroger, mainly, for wiping out the competition. That said, Kroger has done a much better job around here since committing themselves to this market. It's refreshing to have them be as friendly (or, in their words, "visible" and "accessible") as they are, considering we could be left with a faceless corporation greedily enjoying their position as number one. They stepped their game up after the backlash when they purchased the Schnucks stores, so I think that's why they've gained support since then.

      Indeed! Walmart is the type of faceless corporation enjoying their status that I mentioned. I think they're comfortably in the number two spot, but if Kroger keeps up with the same service in its Marketplaces (and builds enough of them), they could make a dent in Walmart's success locally. I'm unsure how Marketplaces do nationally, however. Most people I know of are excited about the larger grocery selection (and Starbucks :P ), but are wary about buying clothes et al. at a Kroger store. With Memphis being Memphis, it's also worth considering where they could safely build Marketplace stores. I can't speak for the future though... who knows, they may be a smash hit!

    2. I can't blame people for being mad at Kroger. I know I can understand that feeling of being angry. If a local chain (such as Tops) was bought out by another supermarket company with a presence in my area as well, I wouldn't be too thrilled either. I guess that is what the FTC is for although they didn't do much here....

      Its good to hear that Kroger has at least upped their community presence. If only Walmart followed in their footsteps....

  4. Yes, Seessel's was more or less wiped clean by Albertsons (though I don't know how much damage Bruno's did--Bruno's was being destroyed under KKR at the time). I do know that it was Albertsons who closed the central commissary (and I believe the bakery too, as Albertsons did not operate plants). What I didn't know was that they purchased Jitney Jungle, as like Delchamps, I assumed Jitney's stores were generally going to be out of date stores that no one wanted except for bottom-feeder discount grocery outlets. Are the former Jitney stores still in operation as Kroger stores today? Where were they?

    1. You're correct about Albertsons closing the commissary and bakery (although Seessel's did continue to carry their signature baked goods). And you're spot on about the Jitney stores they purchased... I think those, as well as the Seessel's stores which were also pretty aged, didn't help Albertsons whatsoever and accelerated their departure. (As quoted in the post, Seessel's looked like a good deal for Albertsons, but so many facets just weren't as great as Albertsons was expecting and they weren't able to turn them around.) Unfortunately I don't know which stores they purchased. I was never able to find a list of which stores Albertsons bought, or Schnucks for that matter, although there's plenty of documentation on which stores Kroger bought in 2011. I bet if I cared to dig deeper I could find it out there, but I wasn't too concerned about it for this post.

    2. Reading further, it looks like the Jitney Jungle stores bought were either MegaMarket (their "warehouse" chain that had larger square footage) or the Premier stores (a company push to build larger modern stores). I also see that Albertsons built the Seessel's stores with garden centers, one of those things that Albertsons did with a few divisions that never quite caught on. I was able to find a picture of the signage though I've never seen one in person, LLC cut the remaining ones in 2006.

    3. Thanks for that update! And yes, at least one of the Seessel's stores Albertsons built included a garden center (I mentioned this in the post), and I don't doubt others did, also. That picture (and for that matter, the sources you used to gather that Jitney Jungle info) sound[s] interesting!

  5. A little further research shows that while Albertsons bought these stores in early 1998, they later bought a number of Bruno's stores in Nashville later that year after Bruno's declared bankruptcy. Albertsons sold the stores to Publix in 2002 when the Mid-South Division (Seessel's included) was shut down, but it's fascinating imagining the Bruno's stores, with their upscale 1980s appearance and glassy second level(?!) as Albertsons stores. I'm surprised these aren't covered on this site yet.

    1. Those stores do sound pretty fancy! I haven't devoted any research to them, however, and in any case they probably won't be featured here because Nashville is outside of the Mid-South as defined in my blog's header picture. (That isn't to say I haven't done out-of-area stuff before, but when I do I usually try to avoid going in-depth as I would surely have to do regarding those Bruno's stores!)

  6. I had been working for Seessel's for 9 years when the stores were sold to Albertsons. I left not long thereafter (moving out of Memphis), but had seen enough at the time to convince me that the whole operation was doomed. I had put in time at the Union Avenue store, Goodman Road, and finally Balmoral. While Seessel's had been expanding dramatically, the expansions were not always immediately successful. There were also internal rumors about friction between Art and Jerry -- I was too junior to have much of an opinion, but I will say that I found myself cart-wrangling late one night outside the recently-opened Bartlett store (at Stage & Germantown Road, which seems to have been torn down now) with Art Seessel himself. Never met Jerry, however.

    When the Albertsons people came in, there was an immediate push for cost control, which led to hours being cut on Front End, where I was working. I was told that a lot of the store-brand products were being swapped out even though customers didn't like it, and the bakery/commissary shutdown was strongly predicted.

    I came back a few years later to visit, after Schnucks had taken over, and my few remaining coworkers were thoroughly beaten down and demoralized. When I was there, we took pride in doing an excellent job and providing excellent products... but that wasn't cheap, and evidently it fell by the wayside.

    1. Thanks for visiting and sharing that story, Michael! It's great to hear the perspective of someone who worked for Seessel's and was there for the transition to Albertsons. While it's not terribly unexpected to hear of those negative ramifications of the Albertsons takeover, I am a bit surprised to hear of those internal rumors and the expansions not always having been successful... I always assumed Seessel's was one of those stores that could "do no wrong" in its customers' eyes, back when they still had that pride you mention before the brand eventually was diminished.

      As for that Bartlett store, I think (if I'm thinking of the same store you are) the building is still there, albeit heavily remodeled. It's subdivided between several stores now. You might be interested in this post, where you can see (what I hope is!) a complete list of all the Seessel's stores during the Albertsons days:

  7. I loved going to Seessels as a kid. Always going to bakery for my free lady finger. Everything sold at Seessels was top notch, including the service.

  8. Ditto about enjoying Seesels as a kid and young adult. Our grandparents and mother often sent us there to shop for was walking distance and a very
    enjoyable outing. I miss it.
    CPE cpe.


Have any info to share, or simply want to join the discussion? Please feel free to leave a comment! Comments are welcome on any and all posts so long as you adopt a username and do not post any malicious links. Comments are subject to moderation before being approved, so please be patient if your comment does not appear automatically. Please remain civil in your comments. If we decide your comment is inappropriate, we reserve the right to delete it.

Disclaimer: The Mid-South Retail Blog exists solely for educational and historical purposes. This blog claims no ownership of, or relation to, any organization, retail or otherwise, whose property may be featured in pictures or in links within posts. We are not affiliated with, or endorsed by, any entity featured on the blog. However, we do claim ownership of our content, unless it is credited otherwise. If you find any inaccuracies in our posts, please let us know in the comments or via email so that we can make any necessary changes. Information on the blog may be frequently updated without notice.