Farmer Jack, Food Basics May Sell Over 100 Stores

Grocery Analyst Says Company Mismanaged Stores

POSTED: Thursday, April 7, 2005

UPDATED: 9:39 pm EDT April 7, 2005

More than 100 Farmer Jack and Food Basics grocery stores may soon be up for sale, Local 4's Business Editor Rod Meloni reported.

Industry sources said A&P, Farmer Jack's parent company, hired two different companies -- one in Chicago, the other in Farmington Hills -- to actively broker sales deals.

Video

Analyst Discusses Possible Farmer Jack Sale

The company is expected to sell 70 Farmer Jack and Food Basics stores in the metro Detroit area to one large chain, Local 4 reported. The 32 outlying stores, including locations in Imlay City, Flint, Ypsilanti and Ann Arbor, would get sold to smaller independent stores.

Grocery analyst David Livingston said the company is being forced to sell its stores because its mismanaged them for many years.

"A&P as a whole has done a very poor job of operating stores," Livingston said.

Possible buyers of the grocery stores include Kroger -- which has a reputation for buying up competitor stores -- and Giant Eagle, a Pennsylvania chain that recently expanded into Toledo, Ohio.

Livingston said Giant Eagle would be a good replacement for customers.

"Their operation is a step up in class from Farmer Jack and I can see where they would have interest in coming into the area," Livingston said.

Analysts said shoppers may lose out in the end as 20 to 25 of those stores could close for good.

The United Food and Commercial Workers Union, which represents Farmer Jack workers, said so far they've heard nothing from the grocery chain about a possible large-scale sell off.

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