VONS CLOSES EXPO UNITS

ELLIOT ZWIEBACH

ARCADIA, Calif. -- Vons Cos. here said it has closed its eight Expo grocery warehouse stores and plans to convert most of them to Vons stores over the next few months. The chain also said it will expand its upscale Pavilions combination-store format, with plans to open approximately 15 Pavilions units in 1996 and 1997, including the introduction of the format into the San Diego market next year. Expo, which combined club-pack sections with conventional grocery departments and deep-discount drug stores, was introduced in August, 1993. All eight stores closed Jan. 22.

Vons operates 33 Pavilions in Los Angeles and Orange counties. It introduced the upscale format in 1985. According to Lawrence Del Santo, Vons vice chairman and chief executive officer, "The decision to close the Expo stores was a difficult one. However, these stores have not produced the financial returns required to justify continued operation. "With limited resources, we believe our energy and capital are best directed to proven formats such as Vons and Pavilions." Julie Reynolds, senior communications coordinator, said most, but not all, of the eight Expos will be converted to the Vons format. However, she declined to say what would be done with the stores that are not converted to Vons. According to Jonathan Ziegler, a securities analyst with Salomon Bros., New York, "By eliminating Expo, Vons will segment itself with Pavilions for upper-income consumers and Vons for a broader-based consumer, thereby abandoning the aggressive low-price sector to Stater Bros., Max [Albertson's warehouse format] and Food 4 Less.