RALPHS PLANS TO SPEED UP EXPANSION OF NEW FORMAT

ELLIOT ZWIEBACH

COMPTON, Calif. -- Ralphs Supermarkets here said it plans to accelerate expansion of its new Fresh Fare format beyond its original expectations and to increase the departmental offerings at its Marketplace stores.

According to Sam Duncan, Ralphs Supermarkets president, sales are up a minimum of 50% at the four conventional-sized stores Ralphs has converted to the upscale Fresh Fare format. As a result, rather than contemplating six openings over the next few months, the company plans to open 15 or 20 additional Fresh Fare units over the next 18 months, Duncan said.

He also said a remodeled Marketplace in La Jolla, Calif., will incorporate two new departments -- a cooking school and a bookstore/espresso cafe.

Ralphs Supermarkets, a division of Ralphs Grocery Co., is operated by Fred Meyer Inc., Portland, Ore., which is being acquired by Kroger Co., Cincinnati. Duncan told SN the change in ownership will not affect Ralphs' plans.

Fresh Fare is a perishables-oriented format that was introduced by Ralphs late last year to maximize the potential of stores in the 25,000- to 35,000-square-foot range in upscale neighborhoods and to make use of smaller real-estate opportunities that may not accommodate larger Ralphs units.

Itemization at the stores is different, Duncan noted, with about 25% of Fresh Fare's 45,000 stockkeeping units unique to the format, including additional gourmet and home-meal replacement products, plus nutritional centers and a wider assortment of specialty nonfood items.

When the first Fresh Fare opened in late October in West Los Angeles, Duncan told SN the company expected that store and subsequent conversions to boost sales by 30% to 35%.

However, looking at sales at the four stores that opened before the end of 1998, Duncan said, sales are up 50% at the West Los Angeles store "and equal to or better than that at the other three," located in Mission Viejo, Anaheim Hills and La Canada, Calif.

"The increases are consistent and have far exceeded our expectations, which were high," Duncan said. "Consumer response has been incredibly good, and there's been terrific customer satisfaction, with store managers telling us they receive endless customer compliments.

"Consequently, we have looked at other opportunities to commit to the Fresh Fare concept, and we feel we have the potential for up to 15 or more stores."

Duncan said Ralphs had planned to open six additional Fresh Fare stores during 1999, "but now we want to take that to 15 or 20 over the next year and a half."

While most locations are likely to be conversions, "if we find real-estate opportunities where the demographics are right, we would be interested in building a Fresh Fare store," Duncan said.

At the other end of the spectrum from Fresh Fare in terms of size is Ralphs Marketplace, a 55,000- to 60,000-square-foot combination-store format with expanded general merchandise.

The Marketplace format -- an offshoot of a concept Fred Meyer developed for its Smitty's stores in Phoenix -- has been introduced at three remodeled or replacement Ralphs stores over the past six months -- in Redondo Beach, Whittier and Lancaster, Calif.

Duncan said Ralphs will introduce a new wrinkle to the Marketplace concept late this year when it remodels a 65,000-square-foot Ralphs store in La Jolla, near San Diego, to incorporate a cooking school and a bookstore/espresso cafe.

"We've seen cooking schools in other stores around the country, but the bookstore was my idea," Duncan said.

"Fred Meyer stores have large book and magazine sections, but I've always wanted to take a store and put in a Border's concept that provides a casual, relaxing atmosphere in which customers can take the time to read while having a cup of coffee."

The section, located in a corner at the front of the store, will be carpeted and will feature a fireplace, he added.

He said Ralphs is unlikely to incorporate either section in stores of less than 60,000 square feet. The La Jolla store, at 65,000 square feet, is larger than the typical Ralphs because it was built by Smith's Food & Drug Centers, Salt Lake City, which left southern California in late 1996.