UKROP'S TO EXPAND MARKETS, PREPARED FOOD

LISA A. TIBBITTS

RICHMOND, Va. -- Ukrop's Super Markets here unveiled a wide-ranging expansion program that will take it into new markets and improve its position against both supermarkets and restaurants.

The program will enable Ukrop's -- already an industry-recognized leader in the home-meal replacement arena -- to become even more sophisticated in its prepared foods operations.

The company's plans include:

Building eight new units, four of which will be located adjacent to discount stores operated by Target, a unit of Dayton Hudson Corp., Minneapolis.

Moving beyond the Richmond metro area into Williamsburg, Charlottesville and Fredericksburg, Va.

Expanding six existing stores by increasing fresh food offerings.

Adding pharmacies to 12 stores -- the eight new stores along with four others.

Committing $15 million to building a central bakery and kitchen, a floral center and a cross-docking facility for perishables.

Developing a smaller format to serve more rural areas.

"We may be smaller than our competitors but we can be fully competitive with any other supermarkets in central Virginia," said President Robert Ukrop. "We will compete vigorously to keep our

customers satisfied with the service, quality and value they get at Ukrop's, not only in comparison to other supermarkets, but to traditional family restaurants and chains such as Kenny Rogers Roasters and Boston Market as well."

Ukrop's announcement was far-reaching, detailing its growth plans through the end of the century. The chain intends to build eight stores -- five new ones and three replacement units -- to end the century with a total of 28 stores, up from 23 at present.

The expansions will be financed by a combination of internally generated funds and private debt placements, according to a statement from the company. Ukrop emphasized that not all the store sites have been selected yet.

Ukrop's first store outside the Richmond area will open in Williamsburg. Other stores outside the area -- in Charlottesville and Fredericksburg -- will open in 1999. Ukrop's said at least four of the new supermarkets will be adjacent to Target discount stores: Williamsburg and Charlottesville and, in Richmond, Virginia Center Commons and Chesterfield Towne Center.

Six existing stores will be expanded to include "restaurant-quality" cafes and grills. In addition, pharmacies will be installed in the eight new stores as well as four existing stores -- Buford, Laburnum Park, Petersburg and Chesterfield Meadows. That will bring Ukrop's total number of in-store pharmacies to 20.

The company announced it has already begun upgrading a facility it purchased several years ago that previously held a Thalheimer's Department Store. The $15 million project involves converting at least some of the space currently used for warehousing into a central bakery and kitchen, a floral center and a cross-docking facility for perishables.

Once the project is completed, Ukrop's intends to move its central kitchen from its current site near corporate headquarters to the Thalheimer's facility. The central kitchen will ensure that its ready-to-eat and ready-to-heat foods are prepared under strict quality control measures, said James Ukrop, vice chairman and chief executive officer.

The cross-docking facility will minimize the time perishables such as prepared foods, poultry and deli items are warehoused and cut delivery time to the stores. "Ukrop's suppliers will deliver fresh products to the cross-docking facility, where they will be unloaded directly into Ukrop's trucks rather than stored briefly in a warehouse," said the statement from the chain.

The company is developing what it calls a "corner grocery," a retail format that would ideally serve customers who live in areas where larger-format stores might not be viable. The 59-year-old business is also "exploring alternate methods of delivering its food products to its customers," the statement said. No details were available.