Several companies zeroed in on noncontiguous markets outside their home territories in 1996, with some eyeing foreign expansion in the next few years.
Quality Food Centers, Bellevue, Wash., perhaps set the industry's most ambitious growth scheme. In September, it unveiled plans to form a holding company dedicated to seeking expansion beyond Washington in any markets where opportunities might arise.
QFC's first stop was southern California, where it disclosed plans in late November to merge with Hughes Family Markets, Irwindale, Calif. -- leaving Hughes' management and employee base intact while providing funds for growth and additional acquisitions in the area.
Supervalu, the Minneapolis-based wholesale giant, also made its first retail move into southern California by acquiring Sav-U Foods, Rancho Cucamonga, Calif., in September. The 21-unit limited-assortment chain will be converted to the Save-A-Lot banner by mid-1997. Supervalu said it expects to expand to 100 locations in the area in the next two to three years, with long-term potential for 200 to 300 stores.
In another thrust beyond home territory, Byerly's, an upscale Edina, Minn.-based chain, opened its first two stores last spring in Illinois -- in Highland Park and Schaumburg, both Chicago suburbs -- with plans for six to 10 more in the Chicago area over the next few years.
Early this year, Smith's Food & Drug Centers, Salt Lake City, contracted its operations by selling 17 of its 34 stores in southern California to other supermarket operators and closing the rest. The move had been anticipated because of Smith's difficulties getting an adequate return-on-investment in recession-plagued southern California.
But in an unexpected move, Smith's bolstered its position in the Phoenix market when it negotiated a stock merger with Yucaipa Cos., Los Angeles. Under the deal, Smith's acquired Yucaipa's 28 Smitty's stores in Arizona in exchange for giving Yucaipa a stock position in Smith's.
While other companies rolled into new trade areas, three companies were contemplating more far-flung expansion:
H.E. Butt Grocery Co., San Antonio, said it will open its first supermarket outside the United States -- to be called Supermercados Internacionales H-E-B -- next month at a site near Monterrey, Mexico, 150 miles south of Laredo, Texas. Another Mexico store is slated to follow later in the year.
Smart & Final, Los Angeles, which already operates stores in Mexico, entered the Florida market in early 1996 and said it hoped to expand its operations into Puerto Rico in 1997.
IGA, Chicago, said it would continue its international expansion by entering South America for the first time, with at least five stores planned for Brazil next year. It also opened its first stores in South Africa last month.
Other operators entered more contiguous markets this year, including the following:
H-E-B opened its first store outside Texas: a Pantry Foods store in Lake Charles, La.
Harris Teeter, Charlotte, N.C., entered the Nashville, Tenn., market with a single store.
Giant Food, Landover, Md., opened its first Super G store in Pennsylvania as part of a 40-store northward expansion over the next 10 years that will increase its presence in Delaware, New Jersey and Pennsylvania.
Albertson's, Boise, Idaho, entered Mississippi with three stores in Jackson. The chain said it is looking for potential store sites in the St. Louis market -- which would be a new trade area for Albertson's -- but had not yet indicated whether it has decided to enter that market.
Sutton Place Gourmet, a Rockville, Md.-based specialty retailer, entered metropolitan New York with a store in Woodbury, N.Y., on Long Island.
On tap for 1997 and beyond are expansion moves by several chains, including the following: Vons Cos., Arcadia, Calif., said it would expand its upscale Pavilions format into San Diego in 1997.
Shaw's Supermarkets, East Bridgewater, Mass., disclosed plans to open stores in New York -- its first locations outside New England -- in 1998. At least eight more units are planned in counties around New York City over the next few years. Though it already operates many stores in Boston suburbs, Shaw's also unveiled plans to open stores within the city of Boston.