AHOLD DEALS REDRAW NORTHEAST MAP

JENNIFER L. BALJKO

CHESHIRE, Conn. -- Bozzuto's here stands to become a key retail player in Connecticut as proposed deals with Ahold could double its store base, SN learned last week.

Yet the voluntary wholesaler isn't the only operator getting a boost from Ahold, Zaandam, Netherlands, which has stirred ripples in the New England market with 31 supermarket divestitures required in its acquisition of Stop & Shop Cos., Quincy, Mass.

The latest developments include the following:

Bozzuto's said it is considering plans to buy four more Edwards stores in Connecticut from Ahold, with an announcement of the move pending last week. In the summer, Bozzuto's signed a letter of intent to acquire four Edwards units and one Stop & Shop in Connecticut from Ahold.

Supervalu, Minneapolis, has signed a letter of intent to purchase six Edwards stores in Rhode Island and one Stop & Shop in Massachusetts from Ahold. Star Market, Cambridge, Mass., initially planned to buy the stores but withdrew its letter of intent in late summer.

The Federal Trade Commission has given Ahold final approval to proceed with the sale of five supermarkets to Big Y Foods, Springfield, Mass., and 14 locations to Shaw's Supermarkets, East Bridgewater, Mass. All the units are in Connecticut, Rhode Island and Massachusetts.

If Bozzuto's deals with Ahold go through, its retail operations would jump from nine corporate-owned stores to 18, with all but one located in Connecticut. Though the wholesaler has declined to disclose terms for any of the proposed acquisitions and what would follow, Kevin Daly, director of legal affairs, said the four extra stores -- separate from the Ahold divestiture -- could be included in a soon-to-be completed agreement with the Dutch retailer. "There is a letter of intent to buy the five stores. The other four stores are the subject of negotiations for the purchase and sale agreement," Daly told SN.

Such an expansion likely would trigger some restructuring at Bozzuto's, including the hiring of new executives to oversee retail operations -- one of whom is Kenneth Abrahams, a former Waldbaum's executive, sources familiar with situation told SN.

Supervalu began negotiating with Ahold to buy the seven stores, an FTC spokeswoman said, after Star Market abandoned its proposal to acquire the units. According to FTC documents, Supervalu is slated to buy the stores and then resell them to Ro-Jack's Food Stores, a Mansfield, Mass.-based independent supplied by the wholesaler's Northeast division in Andover, Mass. Ro-Jack's operates six stores in Massachusetts and Rhode Island. The Andover division supplies four corporate-owned units and 248 stores in Massachusetts, New Hampshire, Rhode Island, Maine and New York.

Rita Simmer, a Supervalu spokeswoman, declined to comment on the matter. Ro-Jack's officials could not be reached last week, and an Ahold spokesman said he did not know details about the situation. The FTC said it expects to rule on the proposal when a public-comment period ends Oct. 28.

Last week, Shaw's and Big Y began remodeling some of the stores they bought from Ahold. The FTC granted final approval of the purchases Sept. 30, nearly a week after the public-comment deadline.

Under the agreements, Shaw's is to take over 11 Edwards supermarkets, one Stop & Shop and an undeveloped Edwards site in Connecticut and another in Rhode Island. Big Y will get one Edwards in Massachusetts and four others in Connecticut. Officials for the chains told SN their companies will receive the stores on a staggered schedule, and each unit will be closed for several days for renovations and system upgrades.

Bozzuto's was expected to close a deal for the five stores, and possibly the extra four Edwards units, by the end of last week, Daly said. The FTC must approve the transaction before ownership can change hands.

The four additional stores -- in Niantic, New London, Hartford and Deep River, Conn. -- originally were slated to be transferred to Stop & Shop, but the 20,000-square-foot supermarkets were too small for the Super Stop & Shop format, said Tonya Lyon, spokeswoman for Edwards, Windsor Locks, Conn. Bozzuto's was the only operator that expressed an interest in the sites, she added.

Discussions on the four units surfaced several weeks ago while Bozzuto's and Ahold were working on a deal for the five other properties, according to Daly. "As part of negotiations for the five stores, the four stores came up. They threw it in to sweeten the package," he said. "It was an opportunity that we couldn't turn away. To grab some operations without putting up new buildings was a great opportunity for us."