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Supermarket chains grow and retrench to stay competitive
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Supermarket chains grow and retrench to stay competitive The dismantling of two supermarket chains has "blood in the water" in two areas of the food-retailing sea. The bankruptcy settlements of Big V Supermarkets in NJ NY and PA and Furrs Supermarkets in NM and TX provide insight into what players are active in the high-stakes supermarket game. Big V Supermarkets is struggling to keep control of its own stores’ fates. The 32-unit chain operates stores under the ShopRite banner in NJ. ShopRite is actually a cooperative agreement between 41 independent owners who obtain a minimum of 85% of their goods through the organization called Wakefern. Big V is the largest single Wakefern operator in NJ. Pathmark which operates company-owned stores can become the largest chain in NJ if it wrests control of the Big V stores from ShopRite. The northern NJ market is interesting because of its domination by regional chains. Of the four dominant national chains only Royal Ahold NV has a significant presence in the state with 50 stores from the Edwards conversion and purchase of the larger Grand Union stores. Albertson’s Acme stores have closed several northern NJ stores but remains strong in the southern part of the state. The Kroger Company is involved in the dispersement of Furrs Supermarkets in NM and TX. Kroger owns and operates the Smith’s Food & Drug Stores chain in seven western states. The 116-unit Smith’s chain will run four former Furr’s stores in Albuquerque NM and one each in Santa Fe Los Alamos and Socorro NM. The grocery carousel continues with Kroger/Smith’s selling five units in NM and TX to the other large player in the Furr’s disposition Fleming Companies. The stores are in El Paso TX and Las Cruces NM. Fleming acquired 66 stores from Furrs and had the right to reject up to 27 of the units from the final agreement. The purchase price for the real estate and operating rights was $57 million. Big 8 Foods Inc. will acquire six El Paso TX locations in the sale and national chain Albertson’s has also been mentioned to be interested in stores in Rio Rancho NM and Taos NM. The southwest and northeast are not alone in this acquisition frenzy. Royal Ahold has entered into an agreement to acquire Bruno’s Supermarkets in the southeastern states. Bruno’s will be Ahold’s sixth operating company and will oversee 184 stores in AL FL GA and MS under the names Bruno’s Food World Food Max and Food Fair. Royal Ahold also acquired Alliant Foodservice which distributes food to institutions stores and restaurants nationwide. Winn-Dixie will cement their acquisition of the lion’s share of the Jitney-Jingle chain by renaming the 48 stores Winn-Dixie acquired from the company in October 2000. Bruno’s acquired 20 stores in the auction of Jitney-Jingle locations. White’s Fresh Foods filed for chapter 11 protection in August and is considering closing three locations to try to get back in the black. The 18-unit chain operates in TN and VA and its major creditor is GE Credit Corporation. Even more TN grocery locations may be on the market as the nine Nashville-area stores run by Albertson’s may be closed as part of the company’s planned shuttering of 165 units. The midstates is getting into the act as well. Nash Finch Company purchased 14 U Save Foods Inc.-operated stores in NE KS and CO. The supermarkets will be opened as Sun Mart stores setting the concept up as the largest chain in NE with 31 locations. Sometimes chains will take over locations just so competitors can’t. Giant Foods Inc. acquired two Laneco Supermarkets leases in Bethlehem PA and is rumored to be keeping them dark to protect stores in East Allentown and Bethlehem Township. |