FRED MEYER EYES NORTHERN CALIFORNIA

ELLIOT ZWIEBACH

PORTLAND, Ore. - Fred Meyer here is reportedly considering expanding into Northern California, with the Sacramento market as a possible starting point, real estate sources told SN last week.

Fred Meyer, the multi-department store division of Kroger Co., Cincinnati, has not operated in California since it closed its only store there, in Chico, in 1995.

Kroger officials could be reached for comment last week, though a Fred Meyer spokeswoman confirmed in a published report the company has been scouting locations in the Sacramento area.

Scott A. Reynolds, an independent retail real estate broker in Sacramento, told SN Fred Meyer representatives have been looking at sites in the state capital - a market where the chain's mid-priced approach might fit very well, he said.

"The departure of [Kroger- owned] Ralphs from this market and the potential sale of the Albertsons stores here has left an opening for a mid-priced grocer," he said. "The low end is being covered by Food 4 Less, and Raley's, Nugget Stores and Whole Foods are doing a good job at the high end, while Safeway has been making a strong effort to upgrade its stores to distance itself from Wal-Mart, which leaves the medium price point a little more open."

The biggest problem Fred Meyer might encounter, Reynolds added, is finding sites.

According to Metro Market Studies, Tucson, Ariz., Raley's holds the leading market share in Sacramento with 31.5%, followed by Safeway with 17.1%, Albertsons with 12.1%, Costco with 9.8% and Winco with 4.6%.