Newswatch 2009-08-17

BASHAS' PLANS 14 MORE CLOSURES

CHANDLER, Ariz. — Bashas' plans to seek approval from the U.S. Bankruptcy Court in Phoenix to close 14 more stores. The chain here closed 10 stores when it filed for Chapter 11 restructuring on July 12, after closing five stores earlier in the year, leaving it with a total of 158 prior to the latest planned closings. The 14 stores include 10 in the Phoenix market, including six Bashas', three Food City units and one AJ's, and four outside the metropolitan Phoenix area, including three Bashas' and one Food City.

S&P EYES KROGER CREDIT RATING

NEW YORK — Citing a strong operating performance relative to its peers, Standard & Poor's here said last week that it could raise its credit rating on Kroger Co. “in the very near term.” Kroger's corporate credit rating is BBB- according to S&P, which said it could raise the rating to BBB “if we achieve adequate comfort regarding management's commitment to maintaining a conservative financial policy and Kroger's future operating performance,” according to a statement. S&P downgraded Kroger to BBB- four years ago, a notch from “junk” status. An upgrade would reduce Kroger's cost of borrowing money.

GELSON'S Q2 SALES, EARNINGS DOWN

LOS ANGELES — Arden Group, parent company of Gelson's Markets, said economic conditions and increased competition led to declines in earnings and sales for the fiscal second quarter and first half, which ended July 4. Net income for the 13-week quarter fell 29.4% to $4.7 million, while sales and same-store sales dropped 7.5% to $107.9 million. For the 26-week period, net income decreased 20.1% to $10.5 million, while sales and same-store sales fell 8% to $216.9 million. “In an economy in which consumers are increasingly motivated by price, our competitors have aggressively increased marketing activities, including price reductions. To remain competitive, [Gelson's] has instituted special pricing of selected items in an effort to retain customers and attract new clientele,” Arden said in a statement.

ROUSES, UNION TRADE CHARGES

THIBODAUX, La. — The United Food and Commercial Workers union last week alleged that Rouses Markets here obstructed recent organizing efforts, a charge the retailer dismissed as “blatantly false.” Rouses last week said union organizers who entered stores earlier this month were asked to leave for violating a “no solicitation” policy. According to Rouses, the organizers “falsely presented themselves as Rouses representatives, lied to Rouses' employees and law enforcement, and used deceitful tactics to distribute union cards and deceptive and inaccurate information to Rouses employees.” The UFCW said it would file unfair labor charges with federal authorities over the event.

GIANT STORE CLOSES AS WEIS LOOMS

BINGHAMTON, N.Y. — Giant Market here said last week it closed one of its 12 stores in advance of a takeover by Weis Markets later this month. Weis earlier this year said it would acquire certain assets of Giant in a deal expected to close Aug. 24. Giant said employees of the closing store, located at 56 Main St., would be transferred to other stores in the chain. It was not clear whether Weis would close additional stores when it takes over.