H-E-B ROUNDS OUT SELF-SERVICE BAGEL PRESENCE

ROSEANNE HARPER

SAN ANTONIO -- H.E. Butt Grocery Co. here is adding a self-service branded bagel operation in selected stores in the San Antonio and Austin market areas.

The self-service concept was launched in the in-store bakery of four H.E. Butt units this month, according to sources involved in the project.

The bagel operations will be installed in nine other H-E-B units before the end of the year, said representatives of Manhattan Bagel Co., Eatontown, N.J., the manufacturer that is supplying product to the franchisee operating the new bagel stations.

Officials at H-E-B's corporate offices here could not be reached for comment about the program.

Under the agreement with the 230-unit H-E-B, Primeco Retail Group, Austin, a Manhattan Bagel Co. franchisee, will supply the grocery stores daily with bagels produced at two new regional commissaries.

Manhattan Bagel sources said the concept features custom-designed, low-profile cases. At the first four H-E-B stores, the cases are 9 feet long and can accommodate the company's 21 varieties of bagels and 32 types of cream cheese spread.

In its bakeries that have the Manhattan Bagel cases, H-E-B will offer the branded bagels exclusively.

The self-service format being installed at H-E-B units is new for Manhattan Bagel. Previously, full open production on the premises has been Manhattan Bagel's hallmark, in its free-standing stores and in its operations inside other supermarkets. Self-service is also offered in other Manhattan Bagel Co. outlets, but a service counter is part of the layout, featuring bagel sandwiches and coffee.

"This points to the flexible approach we and our master franchisees are taking with the supermarket industry," said Jason Gennusa, Manhattan Bagel president and chief operating officer, in a statement.

Currently, Manhattan Bagel Co. franchisees operate stores inside units of Cincinnati-based Kroger Co. in the chain's Atlanta marketing area; in stores owned by Vons Cos., Arcadia, Calif.; at Genuardi's Family Markets, Norristown, Pa.; in a Super Foodtown unit in Manalapan, N.J.; and in a new supermarket opened by Clemens Markets, based in Kulpsville, Pa.

Manhattan Bagel Co. plans to have representation, via full-bake operations or the self-service concept, in 70 to 140 supermarkets by the end of 1997, said Rocco Fiorentino, director of business development.

The company currently franchises, licenses and operates 280 stores in 15 states, Washington, D.C., and Canada.