GIANT STEPS UP EXPANSION PLANS

CAROL EMERT

LANDOVER, Md. (FNS) -- Giant Food here is accelerating expansion plans.

The operator has added three more stores to the 18 it had said it would open by the end of 1996, while 20 to 30 additional sites have been identified for future expansion, Giant officials told stockholders at the company's annual meeting here.

Leases have been signed for stores in Carroll County, Md., and Prince George's County, Md., both of which are in the company's traditional operating region of Greater Washington.

The third site, in Cherry Hill, N.J., is the 12th that the company has pledged to open in the next 18 months in its new operating area, the Delaware Valley, which spans metropolitan Philadelphia and Wilmington, Del., as well as southwestern New Jersey.

Giant opened its first Delaware Valley store in Bear, Del., in April 1994. A second opened in Wilmington's Concord Square Shopping Center Aug. 23 and a third was slated to open in Cherry Hill in mid-September.

Sales at the Bear store are running slightly above plan, said Pete Manos, president. He declined to comment on the Concord Square unit because it had opened only two weeks earlier.

About half of the 20 to 30 sites the company plans to focus on after 1996 are in the Delaware Valley, and half are in the Washington area, Manos said. The Washington region includes Baltimore and Washington's Virginia and Maryland suburbs.

Manos told shareholders he is extremely pleased with Giant's previously reported sales gain of 3.6% in the quarter ended Aug. 12 compared with the comparable 1995 quarter, as well as the 21% earnings jump for the same period. He said fresh produce is helping

drive the improvement.

"Produce sales growth is substantially higher than any other departmental sales growth," Manos told SN. "The locally grown produce program plays a large part, but the organic produce and an expanded selection has also given customers a better perception of our produce departments."

The locally grown produce program was launched as a pilot in 1994 and is going full-force this year. It has been widely advertised in newspaper and television commercials featuring Giant's local produce buyer, Bob Hartman.

Giant is planning to launch a similar program in the Delaware Valley. Discussions are being held with the New Jersey Department of Agriculture and with farmers, said John Mason, Giant's director of merchandising and store operations for produce.

"We expect it to be just as successful" as the Washington-area program, Mason told shareholders.

Mike Bush, vice president of real estate, said during the meeting that expansion in Pennsylvania will be slower than in the other states because communities are older and less land is zoned for supermarkets. While noting that the region is densely populated, he asserted that none of the other supermarket operators in the area offer the "quality, selection and service" that Giant does.

David J. Sainsbury, chairman and chief executive officer of the British supermarket chain J. Sainsbury, London, declined to comment on any plans his company might have to acquire a controlling interest in Giant. "We're very happy to be minority shareholders and we'll take the future as it comes," he said.

Sainsbury purchased 50% of Giant's voting stock last year. The other 50% is owned by Giant's chairman, Israel Cohen. Sainsbury controls three board seats and Cohen controls four.

Sainsbury said he is not pushing for any changes at Giant, but is planning to adapt some of Giant's ideas for use in Sainsbury stores. In particular, Sainsbury said he is impressed with Giant's well-run pharmacy and with its Step Saver program, which offers semiprepared foods such as washed and chopped broccoli.

Other successful Giant promotional programs include the Super G private-label line, which is "doing great," said Manos, and its Smash Page advertising strategy.

The Smash Page is a weekly page of newspaper ads featuring several items that tend to do particularly well on sale, such as sirloin steaks, said Terry A. Gans, Giant's vice president of advertising and sales promotion. The items are also promoted in-store.

Giant is developing another Main Street shopping center like the one it opened in Cascades Town Center in Loudon County, Va., last year. The Main Street concept tries to replicate an old-fashioned, small-town shopping experience with brick buildings, sidewalks and street lights.

The new location in Rockville, Md., is being converted from an existing shopping center anchored by a Giant. It should open in the spring of 1997, Stephen L. Oseroff, vice president of shopping centers, told SN after the meeting.