Randall's Food Markets operates 45 supermarkets in the Houston and Austin areas under the Randalls and Flagship Randalls banners. Randall's today forms the nucleus of the current Houston division of Albertsons and is headquartered in the Westchase district of Houston. The office served as the headquarters of the independent Randall's company before its takeover and later the Texas division of Safeway. The Randall's distribution center was in unincorporated Harris County, Texas and now is serviced by the Tom Thumb distribution in Roanoke, Texas in the Dallasâ€"Fort Worth metroplex.
Most stores include fresh seafood, floral, cosmetic, bakery and film processing departments. The premium Flagship Randalls and Flagship Tom Thumb stores have increased their take-out departments to provide fresh made pizzas, pastas and barbecue. Many locations even offer bank branches, ATMs, coffee shops, one-hour photograph processing, drive-through pharmacy windows, fueling stations and full-service counters where a customer can purchase lottery or movie tickets, pay utility bills and car license renewals.
History
Randalls Food Markets was founded by Robert Randall Onstead, R. C. Barclay, and Norman N. Frewin in Houston, Texas, on July 4, 1966, with the purchase of two existing grocery stores. The first Randall's opened in 1966. The company's fourth store opened in 1970, and by the end of the decade the company owned 15 stores and had established itself in the market. In 1980 Randall's had 8% of the Houston area grocery market, making it the fourth largest grocer there. By 1985 the company was the second largest grocer in the five-county Greater Houston area, with 17% of the sales in the market. By 1990 the chain had expanded to 42 stores. In 1991 Randall's earned over a billion dollars in revenue, making it the fastest growing company in Houston.
Expanding from Houston
In the 1990s Randall's expanded into Dallas, Fort Worth and Austin. Cullum Companies, owner of 62 Tom Thumb and Simon David stores in Dallas, Fort Worth and Austin, became part of the Randall's family in 1992, doubling the company's size with more than 115 stores statewide. The Tom Thumb logo was changed to one similar to Randall's, but the Tom Thumb name was retained. Already in Austin with the Tom Thumb name, Randall's added its own name to the market in January 1994 when the company bought 12 AppleTree Markets stores (ironically a grocer formed with former Safeway locations as a result of Safeway leaving Texas in 1988). Nine of the 12 AppleTree Markets and all seven Tom Thumb stores were converted to the Randalls banner, giving the company a significant presence in the Texas Hill Country. The remaining three AppleTree stores were closed. Though the Simon David would remain open until December 1996, after which it became a Saks Fifth Avenue. After many customers lamented the loss of Austin's only Simon David, Randall's decided in 1998 to make its Bee Caves store a Flagship Randall's supermarket, the first in the city and the eighth in the chain.
After 28 years in operation, Randall's began to sell beer and wine in its stores in late 1994. (Though company-owned Tom Thumb and AppleTree stores in Dallas and Austin acquired beginning in 1992 had already been selling beer and wine.)
Kohlberg Kravis Roberts & Co.
In April 1997, buyout firm Kohlberg Kravis Roberts & Co. invested $225 million in exchange for a majority interest in the supermarket chain. Randall's then accelerated its growth in various markets and at the same time sold or closed a number of stores that choked advancement. Within a year, the company opened one store in Houston and three stores in Dallas (including two replacement stores), while closing four stores in Houston, two stores in Dallas (which were replaced) and four stores in Austin.
On February 28, 1999, Randall's had 45 Houston area stores, generating $1060.2 million in annual sales. It had 20.3% of the Houston area grocery market. It had 7,876 Houston-area employees. Within a year before February 28, 1999, one store was opened and seven were remodeled. In July of that year it had 20.2% of the area market, making it the second largest grocer there.
Safeway
In 1999, Safeway Inc., a Fortune 50 company and one of the largest food and drug retailers in North America based on sales, bought the then 116-store Randall's/Tom Thumb chain. The purchase was announced on Friday July 23, 1999. Safeway retained the Randall's name in Houston and Austin and the Tom Thumb and Simon David names in Dallas/Fort Worth, but replaced many of the Randall's/Tom Thumb "Remarkable" house brands with Safeway-label items. Randall's Food Markets, Inc., became a division of Safeway and changed its division name to Randall's Food & Drugs. By 2001, Randall's operated 46 stores in the Houston area, 12 stores in Austin and 69 stores in the Dallas/Ft. Worth area (under the Tom Thumb and Simon David banners).
In early 2005, Safeway was rumored to be attempting to sell the then 138-store Texas division. Instead, Safeway announced by the end of the year it would close 15 Randall's stores in the Houston area, one in Austin, and nine Tom Thumb stores in the Dallas-Fort Worth area. Following the closures Randall's/Tom Thumb operated 62 stores in Dallas, 36 in Houston and 14 in Austin. Safeway said the move would revitalize the Texas division and that it planned to remodel stores to fit its nationally-implemented "Lifestyle" format and introduce proprietary products. The new Lifestyle format features an expanded selection of perishables and a number of unique offerings, including a large selection of natural and organic foods, full-service meat counters, full-service bakeries and floral design centers, as well as sushi bars and olive bars. As a result of intense competition in Randall's operating markets, the "Lifestyle" format stores are Safeway's response in an attempt to recover lost market share. In Houston, market share fell to 6.9% in 2006.
Ceberus Capital
In March 2014, Cerberus Capital Management agreed to terms to purchase Randalls' parent, Safeway, with plans to merge it with its Albertsons chain. Following this, the 44 Randalls stores were re-aligned with the southern Louisiana and Florida Albertsons stores as the new "Houston" division of the company. The Tom Thumb stores were re-aligned with the North Texas Albertsons stores in the Southern division, effectively ending the connection between the two grocery chains.
Hurricane Relief Fund
Although many stores closed during Hurricane Ike, Randalls quickly reopened. The Galveston, Texas store received heavy water damage due to the storm surge, but managed to reopen shortly after the storm. The store's gas station was one of the first in Galveston to reopen.
After Hurricane Ike, Randall's partnered with KHOU Channel 11, 104.1 KRBE, and Jack FM for the Hurricane Ike Relief Fund in order to help those in need.
Loyalty program
Randall's offers a loyalty card (Remarkable Card) that provides a discount on some items, as well as a 3-cent discount on gasoline or a portion of sales proceeds donated to charity. The loyalty card is good at all Safeway stores. (Loyalty cards issued before the purchase by Safeway can only be used at Randall's and Tom Thumb stores; Safeway-branded loyalty cards can be used at Randall's and Tom Thumb exactly as in a Safeway-branded store.) The Power Pump Rewards owned by Safeway that previously allowed customers to spend $100 to receive a 10-cent gas discount was discontinued on September 12, 2009.
References
External links
- Randall's Food Markets official website
- Official mobile site
- Innovative Randalls a remarkable story Houston Business Journal (July 30, 1999) commentary on Randall's being bought by Safeway
- Randall's Food Markets History from FundingUniverse.com
- [1] from reuters, article about Safway being bought with ceberus capital.
