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Tuesday, Aug. 4, 1998
Albertson's aims to be top grocery chain
Purchase of American Stores would add Acme, Jewel and Lucky groceries
By MATTHEW BROWN
Associated PresssSALT LAKE CITY - Albertson's Inc. on Monday knocked Kroger from the top shelf of U.S. supermarkets by announcing its $8.3 billion purchase of American Stores Co., owner of Acme, Jewel and Lucky stores.
The deal will create a huge national grocery and drug store chain, with more than 2,470 stores in 37 states.
(While Monday's acquisition makes the Alberston's chain bigger, Albertson's scaled down operations in Corpus Christi on July 14 by closing its store at Staples Street and Kostoryz Road.
(Albertson's didn't give a reason for closing the 51,000-square-foot store that opened just two years ago.
(The company still operates two Corpus Christi stores, at 5513 Saratoga Blvd. and 4818 S. Padre Island Drive.)
Albertson's and American Stores have ties dating to the 1930s. In 1939, the family of American Stores founder Samuel Skaggs lent Joe Albertson the money to buy his first Albertson's grocery store.
Albertson's corporate headquarters will remain in Boise, Idaho, and the company will keep its name. Albertson's intends to retain both companies' current chain names, although some individual store names may change.
Gary G. Michael, chairman and chief executive of Albertson's, acknowledged increased competitive pressure and the need for cost efficiencies as reasons for the deal.
As supermarkets themselves have grown into vast emporiums in recent years, the companies that operate them have also been striving to get ever larger. Increased size gives the store companies greater strength in bargaining with suppliers.
In addition, grocery chains are facing new competition from retailing giants like Wal-Mart, which sells food at many of its discount stores and just announced plans to test free-standing supermarkets.
``We keep seeing consolidation in the supermarket industry,'' said Tom Agan of the Atlanta-based retail consulting firm Kurt Salmon Associates. ``The chains just keep getting bigger and bigger'' to stay competitive and keep costs down.
There will be more than 218,000 employees at the new company, and no job cuts were immediately announced. But one official did acknowledge that layoffs likely will come in Salt Lake City, where American Stores is based.
Under the deal, Albertson's will pay $8.3 billion worth of stock and will also assume responsibility for $3.4 billion worth of American Stores' debt. Staff writer Jeffrey Tomich contributed to this story. He can be reached at 886-4316 or by e-mail at tomichj@scripps.comPost your comments about local news eventsFront Page || Main Index || News || Business || Texas || South Texas Outdoors || Birdwatching || Sports || Entertainment || Selena || Education || South Texas Attractions || World Wide Web