GIANT POISED FOR MAJOR PUSH NORTH

CAROL EMERT

LANDOVER, Md. (FNS) -- Giant Food here is set to make an all-out move north into Delaware, New Jersey and Pennsylvania.

At the annual meeting here, Giant's management said it expects to open between 10 and 12 stores north of its core Washington market in the near future and, eventually, as many as 36 stores in the chain's new tristate operating area.

"Since October [1993] we've looked at two dozen to two-and-a-half dozen market areas, each of which ultimately might support a Giant store," Michael J. Bush, vice president, real estate, told shareholders in a videotaped presentation at the Sept. 8 annual meeting.

However, Bush said, Giant is "determined not to take third-rate sites."

Pete L. Manos, president, told SN after the meeting that Giant has identified 10 to 12 sites in New Jersey, Delaware and Pennsylvania where it believes new stores could be added "in a short period of time." Manos said it is "hard to find sites" that are affordable and that have good roads and a strong consumer base.

He did not define a "short period of time."

Manos also said Giant plans to open more stores in Washington and the neighboring regions of Maryland and Virginia.

"We expect locations to become available in Baltimore and Washington," he said. "We don't believe the market is saturated."

Giant, which opened its first Delaware store in Bear earlier

this year, will use the Super G banner on its stores in Delaware, New Jersey and Pennsylvania. Giant Food Stores, Carlisle, Pa., has the rights to the Giant banner name in Pennsylvania.

David B. Sykes, senior vice president for finance, secretary and treasurer, said the Delaware store's sales are exceeding projected levels, but he declined to specify results. "It's enough to make us happy," he said after the meeting.

Giant expects to begin building a store in Wilmington, Del., this fall and open it next summer. Construction on a unit in Cherry Hill, N.J., will begin "soon," officials said.

Manos also told shareholders he was pleased with the company's sales results, but was unhappy with the slight increase in second-quarter earnings.

Sales, as reported, increased 3.8% to $826.4 million in the quarter and same-store sales rose 1.4%. Earnings fell due to "lower gross margins than last year and increased selling expenses," Giant said.

"Our future efforts remain focused upon maximizing volume, improving margins and controlling expense," Manos said.

At store level, Giant is focusing on expanding its perishables selections, including bakery bread, produce and fresh fish and meat, Manos said.

"Our goal is to be the customer's first stop for perishables," he said. As part of this effort, Manos noted, Giant recently added 3,200 square feet to its flagship Rockville store to give more space to perishables.

Manos said Giant is still evaluating its two-store test of pricing with electronic shelf labels.

"It's very expensive," he said. "Before we continue, we want to see if there's a payback."

Sykes told SN the company's "Main Street" real-estate concept, which incorporates several freestanding retail buildings into a tree-lined shopping complex, could be used for future store development projects. Giant's real estate division developed the concept, which was used at the company's new store in Loudon County, Virginia.

Shareholders also previewed new television commercials produced by an in-house advertising team. Four of the ads promoted Giant's Super G private label.