ALBERTSON'S TO OPEN 1,250 NEW STORES AFTER MERGER

ELLIOT ZWIEBACH

BOISE, Idaho -- Albertson's here said last week it plans to open 1,250 stores, including 500 drug stores, plus 600 fuel centers over the next five years following its merger with American Stores Co., Salt Lake City.

The company also announced that Teresa Beck, American Stores' president, who had originally agreed to become part of the office of the chairman in the post-merger company, has decided not to join the management team, although she will become a director and consultant for the new Albertson's.

Albertson's also said last week its post-merger plans include the following:

Converting smaller Acme Markets in urban locations to a new perishables-oriented format following a successful test of the format here.

Seeking acquisitions contiguous to Acme in the Philadelphia area and to Jewel Food Stores in the Chicago area.

Building more freestanding drug stores and adding more drug stores to existing supermarkets in Texas and Florida. Albertson's post-merger plans were discussed at a meeting between the company and securities analysts that was closed to the press; the information was subsequently outlined to SN in an interview with the company. Albertson's said it expects to complete the merger with American Stores during the first quarter of 1999, following ongoing negotiations with the Securities and Exchange Commission and the attorneys-general in California, Nevada and New Mexico, where the two companies have overlapping operations.

As previously reported in SN, the combined company will operate with an office of the chairman, which was supposed to include Beck as vice chairman. However, Beck said in a prepared statement, "It was an extremely difficult decision not to join the new management team, but I will continue to provide support as we move through the integration implementation process.

"After the merger, serving on the board and in a consulting role will allow me to stay involved in the company and to pursue personal interests that are important to me."

Beck, 44, who has been with American Stores for 15 years, was named president in mid-1998, just a few weeks before Albertson's and American Stores disclosed their merger agreement.

An Albertson's spokesman told SN he was not sure if a successor will be named to Beck's position as vice chairman in the office of the chairman. In her absence, it will be a three-person office with all three executives coming from Albertson's ranks: Gary Michael, chairman of the board and chief executive officer; Dick King, president; and Carl Pennington, executive vice president of merchandising.

Under the company's new five-year program, Albertson's said, it plans capital expenditures exceeding $11 billion. Between 1999 and 2003, the company said, it will open 1,250 new stores, including 750 combination stores and 500 stand-alone drug stores; remodel 730 units; and open 600 fuel centers. The company operates nine fuel centers currently.

During 1999, Albertson's said, it plans to open 135 new stores, including 95 combos and 40 drug stores; remodel 100 locations; and open 75 fuel centers.

Among the remodels will be an unspecified number of Acme units in smaller, urban areas, the company said; those stores will be converted to a perishables-oriented format developed at a 32,000-square-foot store here that was closed for several months before reopening in August.

A chain spokesman said the store was remodeled to include a pharmacy, a coffee bar and self-service checkstands, plus expanded space for prepared meals and Albertson's Quick Fixin's program, "and we will use the same concept for smaller stores in the Acme chain," he told SN.

The company also said it plans to seek contiguous acquisitions to complement Acme in the Philadelphia area, which Michael described as "a beachhead for growth in the East," and to complement Jewel in the Chicago area.