News Watch 2007-05-28

KROGER REPORTEDLY TO BUY 25 FARMER JACKS

DETROIT — Kroger Co. is planning to acquire up to 25 of the Farmer Jack stores here that A&P is seeking to sell, according to local newspaper reports last week. Neither A&P, Montvale, N.J., nor Kroger, Cincinnati, could be reached for comment. The articles stated that A&P planned to sell another 22 Farmer Jack locations to other retailers, including some customers of wholesaler Spartan Stores, Grand Rapids, Mich., and that the remaining 19 locations have not yet been sold. A&P said in April that it was seeking to sell the 66-store chain and that it would close its distribution center and any stores that remained unsold in the coming weeks. SN previously reported that Kroger and Spartan were possible bidders for the stores.

UNIFIED TO PAY $65 MILLION FOR AG-SEATTLE

SEATTLE — Unified Western Grocers, Los Angeles, will pay approximately $65 million for the assets of Associated Grocers here, according to AG. The two companies announced plans to merge earlier this month. AG's retail owners will have the option to become shareholders in Unified or to exit the cooperative and simply become customers of the distributor. Industry sources told SN the merger will proceed in three phases. Phase One involves due diligence and figuring out what the new company will look like going forward; that phase will conclude with the closing of the sale, probably late in the summer. Phase Two will involve the creation of a new organizational structure, and Phase Three will involve implementation of plans to form a single company.

SHOPRITE CO-OP REPORTS RETAIL SALES OF $9.5B

ELIZABETH, N.J. — Wakefern Food Corp. at its annual meeting this month said it had total retail sales of $9.5 billion for fiscal 2006, which ended last Sept. 30, and wholesale sales of $7.5 billion. The cooperative, which supplies the 200-store ShopRite chain, also said that longtime board member Dominick V. Romano of Ronetco Supermarkets, Ledgewood, N.J., was retiring from the Wakefern board after 36 years. He will be succeeded by his son, Dominick J. Romano. “We will be forever indebted to Dominick's contribution to our great cooperative,” said Joseph Colalillo, who was reelected chairman of Wakefern.

AHOLD EYES REVERSE STOCK SPLIT, CASH PAYMENT

AMSTERDAM — Ahold here last week said it has proposed a reverse stock split and a cash payment to shareholders in lieu of a previous plan to buy back shares. The company has said it will seek to return value to shareholders following the sale of its U.S. Foodservice distribution business to private equity firms for $7.1 billion. The cash payment would be about $2.55 per share. The proposal is scheduled to be presented at the company's annual meeting here June 19. According to analyst reports, Ahold would consider a four-for-five stock split, reducing the number of shares by 20%.

TARGET POSTS PROFIT GAINS FOR FIRST QUARTER

MINNEAPOLIS — Target Corp. here last week said net income for the 13-week first quarter that ended May 5 was up 17.6%, to $651 million, on a 9.2% increase in revenues, to about $14 billion, compared with the year-ago period. Comparable-store sales rose 4.3%. In a conference call with analysts, the company said it was continuing to expand its assortment of private-label foods and natural/organic offerings. “We are rolling out to more than 400 stores throughout the chain an expanded assortment of authentic Hispanic food,” said Gregg W. Steinhafel, president of Target. “And we continue to improve our guest shopping experience at SuperTarget with our expansion of self-service delis, broader assortments of organic and natural foods and locally grown produce, and greater availability of pre-packaged produce to enhance both food safety and checkout speed.”