SAVERITE EXIT CREATES OPPORTUNITIES

Mark Hamstra

ATLANTA -- Although most observers seem to think that the massive cutback unveiled last month by Winn-Dixie Stores would result in piecemeal sales, at least one local real-estate executive said he believes the company's 40-store SaveRite chain in this market could be sold to a single buyer.

"It makes sense that one company would buy the whole thing and then sell the stores they don't like," said Michael Grant, executive vice president of Mimms Enterprises, Roswell, Ga., which owns 50 shopping centers, including two anchored by SaveRite grocery stores.

He said he believes Salisbury, N.C.-based Food Lion is looking at possibly buying "the whole enchilada" in Atlanta, although a Food Lion spokesman told SN the chain was more likely interested in purchasing select Winn-Dixie locations among the 326 sites slated for disposal rather than groups of stores. In addition to the 40 SaveRites, Winn-Dixie also has seven Winn-Dixie Marketplace stores in the market, according to its 2004 annual report.

Grant said another possibility was that two buyers would agree to divide the Atlanta locations, most of which are reportedly leased. He expects a sale agreement to be announced within the next 20 to 30 days.

Real estate professionals in the market agree that many of the SaveRite stores are in strong locations, and that most will find new life either as new supermarkets or as other formats.

"You could split those spaces up into smaller retailers, and in some cases they could become mixed-use residential," said Jeff Fuqua, president of development, The Sembler Co. here.

He said he thinks many shopping-center owners are eager to replace their ailing SaveRite and Winn-Dixie anchors with more attractive tenants.

"Winn-Dixie controlled what they could do with their real estate and how they could develop it," he said. "With those anchors gone, it's probably good for a lot of real estate.

He said the SaveRite stores are scattered throughout a variety of neighborhoods, from low-income sections of the city to areas that are upscale.

"They've been around a long time, and some of those neighborhoods have grown up around those stores during the past 20 or 30 years," he said.

When Winn-Dixie, which is based in Jacksonville, Fla., began converting its Atlanta stores to the SaveRite discount format in 2001, Kroger and Publix had already become the dominant players in Atlanta. Now Wal-Mart Stores, Bentonville, Ark., and Target, Minneapolis, also have several supercenters in the market.

Other retailers that have vacated the area include Cub Foods, Harris Teeter and A&P, while Harry's Farmers Market has sold out to Whole Foods Market, the Austin, Texas-based natural-foods retailer.

Marc Weinberg of the Shopping Center Group, Atlanta, said he thinks it is likely that Kroger, Cincinnati, and Publix Super Markets, Lakeland, Fla. -- the No. 1 and No. 2 traditional supermarkets in Atlanta, respectively -- will pursue some of the SaveRite locations as defensive locations to prevent other operators from opening there.