BUEHLER'S BUYS 16 WINN-DIXIES 2004-10-18 (2)

MARK HAMSTRA

JASPER, Ind. -- Buehler Foods here last week said it has agreed to acquire 16 stores in Kentucky and Indiana from Winn-Dixie Stores, Jacksonville, Fla., and that it plans to convert them to a new banner emphasizing perishables called "Buehler's Fresh Foods."

Terms of the agreement, which is set to close this week, were not disclosed.

"This is a very sizable project for us," said Dave Buehler, chairman and chief executive officer, Buehler's (pronounced BEE-ler's.) "We're going to make a substantial investment in these stores."

He said Buehler's supplier, Associated Wholesale Grocers, Kansas City, Kan., helped negotiate the transaction on behalf of his family-owned company. AWG simultaneously negotiated for the acquisition of about 14 to 16 other Winn-Dixie stores in the area on behalf of other independent food retailers, Buehler told SN.

A spokesman for AWG could not be reached for comment. A spokeswoman for Winn-Dixie said the company was continuing negotiations concerning its previously announced efforts to sell or close 156 stores but declined to comment on specific talks until negotiations were completed. She said Winn-Dixie would provide updated data this week about the number of those stores it has sold or closed through the recently ended fiscal first quarter.

Buehler said the acquired stores are located adjacent to the company's current operating areas in southern Indiana, Illinois and Kentucky. It operates 28 stores under the Buehler's Buy-Low banner in those states and also has 21 Save-A-Lot stores in Indiana, Illinois, Kentucky, North Carolina and Virginia that are supplied by Supervalu, Minneapolis.

Buy-Low stores range in size from 25,000 to 70,000 square feet and include service departments such as pharmacies, video rental, floral and in-store bakeries, Buehler said.

"We're a family-owned company, and we focus on running good, clean stores with friendly employees," he said.

Competitors in the area include Kroger, Cincinnati; Wal-Mart Stores, Bentonville, Ark.; and Meijer, Grand Rapids, Mich.

The Winn-Dixie stores Buehler's is buying average about 45,000 square feet and will be remodeled to create a "power alley" of perishables, Michael Quear, director of marketing for Buehler's, told SN.

"We'll try to bring the standards of those departments up," Buehler said.

He said Buehler's would add about 15 employees to its corporate offices as a result of the acquisition. It currently employs about 2,700 people.