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Published: Wednesday, 4/27/2005

3 Food Basics stores in Toledo will close

BY GARY T. PAKULSKI
BLADE BUSINESS WRITER
This Food Basics store at Cherry and Bancroft streets is among three slated to close. This Food Basics store at Cherry and Bancroft streets is among three slated to close.
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Apparently stung by struggling sales and unable to find a buyer, the parent of Farmer Jack supermarkets plans to close three no-frills Food Basics grocery stores in Toledo a year after they were opened.

Closing will be within 90 days. The stores, which employ 300 people, are at Bancroft and Cherry streets in central Toledo, on South Byrne Road near Heatherdowns Boulevard in southwest Toledo, and on Laskey Road in West Toledo.

The fate of the three suburban Farmer Jack stores is uncertain. Company officials did not announce any plans for those, but they indicated previously that those and affiliated groceries in Michigan may be sold.

"Food Basics operated on a real slim profit margin," said Jeff Stephens, president of Local 911 of the United Food & Commercial Workers union, which represents the hourly workers at the metro Toledo stores. "Business appeared to be fairly good to us. It apparently wasn't enough to make the stores profitable."

"The three stores will be closed," said Richard De Santa, a vice president at New Jersey-based Great Atlantic & Pacific Tea Co., which owns Farmer Jack and Food Basics.

He declined to discuss details of the closings, but Mr. Stephens said the union received notice yesterday, and workers were to be told late yesterday. The closings would be in 30 to 90 days, the union leader said.

It was not immediately clear whether the closings were part of a broader move by A&P.

Three weeks ago, the company put its six metro Toledo stores up for sale, along with 26 stores in the Detroit metro market, in a move that industry analysts said was part of A&P's efforts to cut costs and bolster its stock price.

The Food Basics stores generally were considered to have less than robust sales.

However, the union was told at that time by the company that if the stores couldn't be sold, all would keep operating.

The three Farmer Jack stores locally - one each in Holland, Perrysburg, and Sylvania - were not included in yesterday's announcement, the company spokesman said. Asked if the chain has plans to close those stores, Mr. De Santa replied, "I have nothing on that at this time."

Local 911 has received no signals that the Farmer Jack stores will close, Mr. Stephens said.

A&P entered the Toledo market in 2001, buying three sites from the family-owned Churchill's Super Markets and building three stores. All were Farmer Jacks. But early last year, the company converted three to Food Basics, which is a discounted-price and limited-service store, including requiring customers to bag their own groceries.

The announcement yesterday, although a blow to city residents, is not as significant to the area as the 2003 collapse of the former Food Town grocery chain, when 39 supermarkets owned by a Michigan firm shut. Those closings were attributed to the stiff grocery competition in the area.

Farmer Jack and Food Basics together had about a 10 percent share of the local grocery market, behind Kroger at 47 percent and Meijer at 22 percent, according to recent industry figures.

The Local 911 president said the union plans to meet with chain officials to discuss severance payments for workers. He expressed frustration for union members, many of whom are veterans of the metro area's shifting grocery industry.

"A lot of them moved from Food Town," Mr. Stephens said. "Some of them came from Churchill's. Now they're going to be out looking for a job again. It's a real bad situation for them."

Contact Gary Pakulski at:

gpakulski@theblade.com

or 419-724-6082.



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