Dive Brief:
- Raley’s plans to sell its 13 Aisle 1 fuel stations to Anabi Oil, a convenience store company based in Southern California, according to a press release. Financial terms were not disclosed. The deal is expected to close later this month, and Anabi will take over operations early next year.
- Referring to the deal as a partnership, Raley's said its fuel rewards program with Aisle 1 locations will continue. The two companies will also work together to expand customer services and possibly even build more fuel stations adjacent to Raley's stores. All of the company's Aisle One stores operate alongside Raley's locations.
- "As we continue to move our vision around health and wellness forward, we are focused on our core business of offering healthy food at affordable prices," said Keith Knopf, Raley’s President & CEO. "This move will allow Raley's to advance our long-range strategic plan and sets up a series of moves that will position Raley's for significant growth and expansion."
Dive Insight:
Raley’s has sharpened its identity as a health-focused retailer at the same time that it’s investing in store expansion and remodeling. This latest sale should free up more capital for growth while also keeping it focused on what differentiates it from the competition.
The past few months have seen a series of unconventional moves for Raley’s, which operates 129 stores across five banners in northern California and Nevada. Last month, the company announced it would relegate sugary cereals to the bottom shelf in all of its stores. That followed a decision to remove conventional candy from checkout lanes — a mainstay of impulse purchases for most retailers.
These moves appear less untraditional when considering Raley's evolving position on health and wellness. The company not only offers a wide assortment of better-for-you products but has also taken an active role in guiding and informing customers. Last year, Raley's launched a Shelf Guide program to help customers better understand product labels and packaging. Since then, it has also opened a wellness-focused store format, Market 5-ONE-5, hired a full-time nutrition strategist and renovated its corporate offices to include an on-site gym and walking trail, among other wellness-focused features.
These steps have played well with Raley's health-conscious customer set while setting it apart from conventional grocery stores. To solidify this healthy bent, there's even messaging from the top: Owner and chairman Mike Teel hosts a video series focused on nutrition education and explaining the retailer's latest initiatives.
Raley's has taken its message to new markets this year, with the acquisition of six Scolari's Food and Drug locations in northern Nevada back in March. It's also remodeling stores around fresh and prepared foods, like a location in Windsor, California that got an update after 36 years in business.
The selloff of Aisle 1 fuel stores will bolster more store remodels and the build-out of services like Raley’s online shopping platform. It could also indicate an appetite for further store purchases. In a similar vein, Kroger sold off its convenience store business earlier this year for $2.2 billion, freeing up capital and allowing it to focus on store sales and digital growth.
