TOPS SEEKS CITIES' APPROVAL TO ADD GAS-PUMPING SERVICE

JOEL ELSON

BUFFALO, N.Y. -- Tops Friendly Markets here plans to test a gasoline-pumping service on the parking lots of three stores here, according to Steve Odland, president and chief executive officer, who oversees the 73-unit Ahold-owned chain.

After a limited test run, the retailer envisions adding the gas program to other stores, said a chain official. "We want to make sure they do well before the program is expanded to other locations over the next few years," Odland said.

When the gas starts flowing, Tops will become the first supermarket chain in Western New York to offer fueling services. The goal, said Odland, is to create more convenience for Tops shoppers. Tops is "always seeking new ways to enhance service to our customers," Odland said in a press statement last month. He added the fuel service is "an experiment to introduce the service on a limited basis, to see if it fits our customers' needs."

Odland also pointed out that gas pumps at supermarkets add a new dimension for time-poor consumers. "The busy lifestyle of today's customer has indicated that the more efficient a shopping trip is, the better it is."

The chain has submitted plans to the city of Tonawanda, N.Y., to install a three-pump gasoline island and a small service kiosk at its store at 150 Niagara Street. It also will seek approval from the city of Buffalo for similar pump installations at Tops stores located at Grant and Amherst Streets and Elmwood and Hinman Avenues. There are 28 Tops Markets in the Buffalo area.

To date, Tops has not selected a supplier for the three gas-pump operations. However, the chain may offer the gasoline as a Tops private-label product.

The retailer already has some experience selling both food and fuel in 10 Wilson Farms convenience stores that it operates in rural areas. Those gasoline operations are set up via land-lease relationships, where the gas supplier provides the gasoline and oversees sales and maintenance of the pumps and kiosks. The Tops official said the three proposed Tops fueling centers are expected to be operated directly by Tops employees.

Three of Tops' sister supermarket chains -- Stop & Shop Cos., Quincy, Mass.; Bi-Lo, Mauldin, S.C.; and Giant Food Stores, Carlisle, Pa., all owned and operated by Atlanta-based Ahold USA -- have begun experimenting with gasoline sales in the past 18 months, added the official.

While fewer than 6% of U.S. supermarkets now sell gasoline at their stores, it is a trend that appears poised for continued growth. Some industry experts expect the current count of some 500 supermarkets selling gas to climb 50% by the end of 1999, with further increases thereafter. Among grocery chains with mini-gas-station installations, Boise, Idaho-based Albertson's leads the pack. This year it announced a plan to add 600 Albertson's Express centers over the next five years. There are currently 26 Albertson's supermarkets that offer the gas-grocery combo.

H.E. Butt Grocery Co., San Antonio, expects 15 more fueling centers to join its current group of 30, and Chicago-based IGA now sells gas at some 200 of its franchise units, primarily in rural communities.

Supervalu, Minneapolis, plans 100 gasoline units, and Food Lion, Salisbury, N.C., has opened the first of a planned 80 fueling centers.