EAST BRIDGEWATER, Mass. -- J. Sainsbury, parent company of Shaw's Supermarkets here, said last week it has completed its acquisition of 45 stores from Star Markets Co., Cambridge, Mass. -- strengthening its position in the Boston market and moving Shaw's for the first time into the competitive Cape Cod marketplace.
Ross McLaren, president and chief executive officer of Shaw's, said Sainsbury views the addition of the Star locations "as an important step toward strengthening Shaw's position in New England," noting the company will continue "to explore expansion opportunities in New England and across North America."
Bernie Rogan, a Shaw's spokesman, said the chain plans to invest $70 million to refurbish the stores as it converts 41 of them to the Shaw's banner. However, he said, Shaw's may retain the Wild Harvest banner on four stores; Wild Harvest is a natural-food concept that Star developed as a store format and subsequently as a product line.
Rogan said Shaw's is also looking forward to installing the Wild Harvest line as a section in its core stores.
The acquisition boosts Shaw's volume to $4 billion, including $3 billion in 1998 sales from Shaw's and $1 billion in 1998 sales from Star, a privately held chain.
Shaw's said it will operate 169 stores after the Federal Trade Commission ordered it to divest 10 stores, including seven of the 52 original Star locations and three of the 127 Shaw's units.
The company said five stores have been sold to Victory Super Markets, Leominster, Mass., and two to Foodmaster Supermarkets, Somerville, Mass., with three others expected to be sold within the next three months.
Shaw's said the acquisition makes it the second-largest food retailer in New England -- behind Stop & Shop Cos., Quincy, Mass., a division of Zaandam, Netherlands-based Ahold -- with 91 stores in Massachusetts, 23 in New Hampshire, 21 in Connecticut, 20 in Maine, 12 in Rhode Island and two in Vermont.
As Shaw's refurbishes the Star locations, Rogan said, it plans to remove the Star name and replace it with the Shaw's banner. However, he said, Shaw's may retain the Wild Harvest name on the four existing stores in Boston, Somerville, Framingham and Saugus, Mass.
He told SN the Wild Harvest stores were part of Sainsbury's rationale for making the Star acquisition "because we see opportunities to offer the Wild Harvest product lines in pavilions within our stores going forward."
If possible, he said, Shaw's hopes to include the first Wild Harvest pavilion in a 52,000-square-foot store in Barrington, R.I., scheduled to open in late August. However, because of delays in obtaining FTC approval for the acquisition, "there may not be enough time to include the pavilion at the Barrington store," Rogan noted.
As a result, the debut of the Wild Harvest section could be delayed until later this year, when Shaw's opens a 58,000-square-foot replacement store in North Conway, N.H., Rogan said.
Asked whether Shaw's intends to expand the number of freestanding Wild Harvest units, Rogan replied, "It's too early to determine."
Shaw's said it paid $476 million for Star -- down from the $490 million it had agreed to pay when the deal was disclosed in November -- "because we had to divest more than the five stores we had originally anticipated, which contractually lowered the price," Rogan explained.
Shaw's corporate parent, Sainsbury, formerly owned the majority equity in Giant Food, Landover, Md., which it sold to Ahold in late 1998.