KIRKWOOD, Mo. -- Shop 'N Save Warehouse Foods here, a Supervalu subsidiary, has entered an agreement to buy six Price Chopper warehouse stores in St. Louis.
The units are being purchased from Roswil Inc., also known as Price Cutter/Ramey, Springfield, Mo. The deal ends that company's three-month effort to establish a foothold in the St. Louis market. Shop 'N Save already is an active player in St. Louis, where it operates 26 stores, ranging from 22,000 to 62,000 square feet, and has an estimated 20% of total sales.
The Price Chopper stores, slated to carry the Shop 'N Save Warehouse Foods banner, are 20,000 to 60,000 square feet. Annual sales for those units, which had been supplied by Associated Wholesale Grocers, Kansas City, Kan., were approximately $40 million, industry sources said.
The agreement, announced last week, is expected to be completed in early March. Terms were not disclosed.
Price Cutter/Ramey, a 30-unit chain operating in southwestern Missouri and Arkansas, entered the St. Louis market in November, when it bought the six Price Choppers from Warehouse Foods Inc., a privately held firm in St. Louis. It hit tough times shortly after, however, when it fired 300 employees who were members of Local 655 of the United Food and Commercial Workers. The union then set up picket lines and launched a boycott against the company.
Nick Torpea, president of the local, said he learned from vendors that sales in the stores dropped 35% to 40% due to union handbilling. Price Cutter/Ramey officials have been unavailable for comment throughout the St. Louis experiment.
The new owners have pledged a union shop and will offer employment interview opportunities to current employees as well as those who were former Price Chopper employees, Torpea said.
Price Chopper, an AWG franchised super warehouse-store format, has thrived in the Kansas City market. Most stores are built from the ground up, and all are owned by independents. Yet in St. Louis, the stores have barely made a dent in the market, according to local observers. Most units are in buildings that were vacated by other supermarkets. Although at least two of the Price Choppers being acquired are only a few blocks from existing Shop 'N Saves, Supervalu intends to keep all six stores open.