NEWS WATCH: A&P OFFERS TO BUY BACK OUTSTANDING NOTES... WINN-DIXIE SALES DROP, LOSSES INCREASE IN JUNE... FOOD DRIVES SALES GAINS AT TARGET IN 2Q...

A&P OFFERS TO BUY BACK OUTSTANDING NOTES

as commenced tender offers for its outstanding notes due in 2007 and 2011. The offer, which would retire approximately $460 million in outstanding debt, was expected following A&P's sale of its Canadian division to Metro. A&P said the tender offer includes a consent payment of $30 per $1,000 principal amount of notes tendered before Sept. 7. Based on recent treasury reference rates, the total consideration was approximately $1,044.33 for each $1,000 of the 2007 notes and $1,098.65 for each $1,000 of the 2011 notes, A&P said.

WINN-DIXIE SALES DROP, LOSSES INCREASE IN JUNE

JACKSONVILLE, Fla. -- Winn-Dixie Stores reported sales of $733 million and a loss of $40.3 million between June 2 and June 29. In a monthly operating report filed in U.S. Bankruptcy Court, the retailer based here said it reduced operating expenses by $10.1 million compared with May results, but spent an additional $5 million in reorganization charges in June. Gross profit as a percent of sales in June was 24%. In the previous four-week period covering the month of May, Winn-Dixie reported sales of $755 million.

FOOD DRIVES SALES GAINS AT TARGET IN 2Q

MINNEAPOLIS -- Target Corp. here said strong sales of food and other consumables helped drive comparable-store sales gains of 6.7% in the second quarter that ended July 30. The company said an increasing number of customers are buying both groceries and general merchandise at its 141 SuperTarget locations. In a conference call discussing second-quarter results, Gregg Steinhafel, president, said the company has been increasingly self-distributing grocery items, with nearly 50% of all food stockkeeping units now self-distributed at SuperTarget stores and about 40% of food items at traditional discount stores. By the end of the year, the company said it expects half of all its traditional Targets to have refrigerated coolers and a limited selection of dry groceries.

FRESH MARKET TO DEBUT FOUR NEW STORES

GREENSBORO, N.C. -- The Fresh Market, a chain of specialty grocery stores based here, opened its newest location in Fort Wayne, Ind., last week. The 20,000-square-foot store is the first of four new locations to open this month, the retailer said. Other openings are scheduled for Mandeville, La.; Kildeer, Ill.; and Savannah, Ga. Fresh Market stores feature fruits and vegetables, candies, specialty items and fresh meat. The company operates 47 stores in 12 states.

CUB FOODS SEEKS AD-SPENDING DATA OF RIVALS

MINNEAPOLIS -- Cub Foods, a division of Supervalu, both based here, sent a request to several newspapers in its operating area asking them to disclose the amount of money spent on advertising by its competitors, according to a report in Editor & Publisher magazine last week. The e-mail request, reprinted in E&P, was reportedly sent by an intern at the chain. In it, Cub asked each of the newspapers it contacted to fill out a form requesting the number of ads, number of inserts and total spending by rival supermarket chains. Supervalu could not be reached for comment.

GROCERY OUTLET PLANS FOUR-STORE EXPANSION

BERKELEY, Calif. -- Grocery Outlet here said last week that it would add four new independently operated stores in Washington state during the coming months. The extreme-value retailer said new locations would open in Bonney Lake in September and in Carmas, Madrona and Marysville during October. Grocery Outlet encompasses 122 stores in seven western states.