Big Bear in San Diego

Uh...California.

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Groceteria
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Big Bear in San Diego

Post by Groceteria »

Anyone know about the disposition of the Big Bear chain in San Diego (which was unrealated to the chains of the same name in Seattle, Ohio, and North Carolina)?

I'm told that some became warehouse stores and were ultimately branded Food4Less, but was the chain sold as a whole or piecemeal. If it was sold as a whole, who bought it?
ieguy441
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Post by ieguy441 »

I originally contacted you about this.. While I have no further details, I will get a photo of the now rebranded Food4Less in Temecula and the closed Mega Warehouse Foods (now The Oceanside California Police Station). I was told that the Food4Less in Banning, CA was also a Big Bear that was rebranded Mega Warehouse. I have an old newspaper around here around some where that features a Mega ad. If I run across it, I'll scan the logo.
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Post by storewanderer »

Mega operated in Las Vegas, too. They had a store in El Cajon across from the Longs on Jamacha Road. Looked like a former of some conventional, but I couldn't figure out what.

Don't quote me, but I think Mega was owned by Fleming.

Not sure what came of the ones in Las Vegas. Price Rite maybe. Food 4 Less now.
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Post by Jeff »

Food 4 Less on the Banning / Beaumont Border was originally a Kmart. When it moved across the freeway, Food 4 Less moved in.

This is the only shopping center I know that has a Stater Brothers and a Food 4 Less in the same center. 2 markets in one center.
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Post by jamcool »

Mega Foods started in Phoenix as "Mega Warehouse Foods" in the 80s..they expanded into Las Vegas by buying the Food 4 Less stores there (before Ralphs/Kroger ownership) and into SoCal by the 90s. Unfortunately they overextended their reach and went into liquidation. The Vegas stores went to Smith's and became PriceRites..then back to Food 4 Less(!) under Kroger ownership. The rest were either closed or sold to other operators. Mega was originally a Fleming customer, but switched to Certified (they sold the Springfield brand) and finally to Safeway (Glencourt-branded products). In fact, there were rumors that Safeway was going to buy out Mega (to have a second store banner) and that when that fell through, Mega went into liquidation.

The "warehouse" style stores have basically been failures in PHX. Food 4 Less had a few stores here which closed when Fleming went under, Mega and Cooke's were only in operations for a few years, and Waremart came and went quickly in the early 70s.
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Post by ieguy441 »

Megafoods takes over two Big Bear stores, sparks union protest. (Mega Foods Inc.; Big Bear Stores Inc.)San Diego Business Journal; 7/6/1992; Hock, Sandy

Big Bear Supermarkets is turning over two of its North County stores to Megafoods Stores Inc., a Mesa, Ariz., chain that has run afoul of the San Diego city attorney's office.

San Diego-based Big Bear closed its Oceanside and Vista stores June 28 and will sublease them to Megafoods. The locations are the second and third stores Big Bear has closed since April 1, when Pay Less Drug Stores assumed the lease of Big Bear's Normal Heights store. The company, controlled by the Mabee family, has 16 supermarkets left in San Diego County.
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Post by ieguy441 »

Mega Warehouse Foods plans 50% expansion of hybrid club concept - Megafoods Stores Inc., supermarket that uses warehouse store-style marketing
Discount Store News,  April 5, 1993  
MESA, Ariz. -- Mega Warehouse Foods, eyeing a 50% expansion for its hybrid warehouse-type operation, plans to open at least 12 stores this year, with a unit already unveiled in Henderson, Nev.,--its third in the Greater Las Vegas market--and six more due during the next three months.

The openings set by the now 23-store Southwest chain include replacing its initial Mega Warehouse Foods, a 34,667-sq.-ft. store in Mesa, with its 52,000-sq.-ft. prototype during the second quarter starting this month.

Other openings during the quarter include another two in the Greater Phoenix market, two in San Diego County, Calif., in Santee and Blythe, and one in San Luis, Ariz. Expansion during the third quarter calls for two more in the Phoenix area, where the chain currently has 10 stores, two in San Diego County, Calif., in San Marcos and Poway to double its count to eight in Southern California, and in Coolidge and Tuscon, Ariz., to also double its count in Arizona markets outside of Phoenix.

Besides its expansion program, Megafoods is also phasing in fast-food takeout courts in its stores that will provide products from such eateries as Kentucky Fried Chicken, Pizza Hut and Taco Bell on a licensed basis. It tested the program, designed to boost store traffic and volume, late last year in its University Square, San Diego store.

Last year, Megafoods added eight stores to help propel sales for the fiscal year ending Jan. 2 to $292.9 million, a 19.7% jump from $244.7 million in 1991. Net income, before a non-recurring charge of $1.1 million, amounted to $1.4 million, or double the $627,000 earned in the prior year.

The 5-year-old company, which went public at the end of last year, uses a wholesale club merchandising and marketing format for its food-oriented operation, while playing up its greater assortment of 20,000 skus and lack of any membership requirement.

Megafoods uses the proceeds of the initial public offering to reduce its dependence on the Fleming Co., a wholesaler that is the company's major supplier. It has begun to develop relationships with other suppliers.

The IPO netted Megafoods $37,968,000 from the sale of 2.8 million shares at $13.56 a share. A major portion of the funds were used to repay a loan of about $23 million from Fleming and to repay $1,480,000 to Fleming that was used to acquire two stores in Las Vegas. Two stockholders sold another 200,000 shares for $2,712,000 for their personal account.

Megafood's founder, Dean G. Miller, an experienced grocery industry executive who retained about 28% of the stock following the IPO, combined the warehouse format and its low-cost operations with the promotional appeal of traditional supermarkets as the way to offer the lowest possible prices to "the price-conscious segment of the retail grocery market," the company's prospectus noted.

The result of this hybrid operation: Megafoods' gross margin last year was 15.6%, up slightly from 14.8%. That figure was higher than the wholesale club industry's average 10% gross margin, but is about 60% under that of the traditional supermarket industry's 25% margin.

The warehouse format allows Megafoods to build a new store shell at about 20% less than the capital costs of a typical supermarket, the company said, while merchandising pre-packaged goods has resulted in sales per employee hour of approximately $140, compared with about $95 for the combination or superstores operated by supermarkets.

Megafoods projects development and construction of company-owned stores ranging from $2.5 million to $4 million a unit, depending on location and other factors. Its average investment in a new leased unit is about $1,625,000, with $1.2 million going for fixtures, equipment and other improvements and $425,000 for working capital. It also incurs indirect costs of about $175,000 for rent, labor, advertising, utilities and professional fees prior to a store's opening.

Megafoods' hybrid format forms the theme of the chain's current ad campaign in local newspapers and on TV: |Shop Us Like A Supermarket. Save, Like A Warehouse Club.' Spanish language print and broadcast ads are used in Hispanic communities within Megafoods' markets.

The chain positions itself as a low cost club-type alternative to supermarkets by merchandising a food-oriented assortment that includes basic and convenience non-foods like housewares and motor oil in stores opened 24 hours a day, seven days a week. The stores draw shoppers from a four- to seven-mile radius, the prospectus noted, while supermarkets attract customers from one to three miles away, while clubs pull members from a 20- to 25-mile radius.

Megafoods began by featuring large package size, but has worked with suppliers to expand its offering of club packs. More space is now devoted to club packs, which are displayed under signs identifying them as "Club Busters." Its dry grocery mix includes two private labels, Megafresh and Rainbow.

Megafoods has registered its name and the Megafresh and Rainbow private labels only in Arizona. But the chain uses the Mega name in other markets under its supplier agreement with Fleming, which has trademarked the Mega logo in other states.

Should Megafoods end its supplier agreement with Fleming, it can continue to use the Mega name only in its current markets of the states of Arizona and Nevada and the counties in Southern California where it operates stores.

Megafoods said that repaying the Fleming loan "will position the company to pursue alternative distribution and supply arrangements intended to reduce inventory costs and improve profitability."

The company has an agreement with a subsidiary of Safeway Inc. to buy dairy products on more favorable terms than from its previous supplier. It is also "investigating" a joint distribution agreement with Safeway and Smitty's Super Valu in Arizona that would involve a full-line of merchandise.

COPYRIGHT 1993
mikeinaz

Mega Foods

Post by mikeinaz »

In case anyone ever wonders what happened to Mega Foods, they eventually shuttered most of the stores and sold the remains to Basha's Markets.
jamcool
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Post by jamcool »

Bashas' has been very successful by buying the remains of defunct Arizona chains....First A J Bayless, then Mega Foods,Southwest Supermarkets,and finally ABCO/Desert Markets
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Post by klkla »

Back to the original question... I believe Albertson's cherry picked the best locations and took over Big Bear in the end.
ieguy441
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Post by ieguy441 »

I seem to recall that another Oceanside "Big Bear" was later converted into a MiraCosta College campus and the one in Vista was also converted into a Mega Warehouse. I think Albertsons now resides there.
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