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CINCINNATI - So the speculation was true, after all--making good on its stated goal to grow via strategic, affordable acquisitions, The Kroger Co. here said yesterday it will acquire 20 of the 66 Farmer Jack stores in the Detroit metropolitan area from The Great Atlantic & Pacific Tea Company, Inc.
The deal, which follows just three months after Kroger inked a pact with Supervalu to acquire its 18 Scott's Food & Pharmacy stores in northeast Indiana, puts an end to rampant local speculation that the nation's top-ranked supermarket chain would be picking up a number of Farmer Jacks in the Detroit market.
Just prior to yesterday's announcement, Kroger had initiated a hiring spree to add some 3,000 workers to its employee rolls Michigan, and local observers overwhelmingly viewed the move as a precursor to grabbing a number of the soon-to-be sold or closed Farmer Jack stores.
Terms of the deal, expected to close in July, were not disclosed.
The newly acquired stores will become part of Kroger's Columbus, Ohio-based Great Lakes division, which operates 244 stores under the Kroger banner in Ohio, West Virginia, and Michigan, and already employs more than 13,000 workers in Michigan.
The Farmer Jack stores included in the sale agreement with Kroger are in the Michigan cities of Birmingham, Dearborn Heights, Dearborn (2 locations), Northville, Hartland Township, St. Clair Shores, Hazel Park, Troy (3 locations), Sterling Heights, Algonac, Grosse Pointe, Roseville, Westland (2 locations), Brownstown Township, Romeo, and Imlay City.
Kroger passed on purchasing available Farmer Jack sites located within the city of Detroit.
Montvale, N.J.-based A&P, which had acquired the Farmer Jack chain in 1989, revealed plans this spring to unload the unit, and concentrate instead on its Northeast operations. The chain set a July 7 target date for the Farmer Jack stores to be closed or sold.
An official with the United Food and Commercial Workers Local 876, which represents 4,800 Farmer Jack workers, was quoted as saying earlier this month that at least 21 stores had attracted no bids. Besides Kroger, Hiller's Markets, Hollywood Markets, and Spartan Stores, all based in Michigan, have been mentioned as possible buyers of some Farmer Jack stores, but none have disclosed their interest or plans publicly. Companies who filed bids for Farmer Jack stores signed non-disclosure agreements.
Kroger operates 2,468 supermarkets in 31 states under two dozen banners, including Kroger, Fred Meyer, Food 4 Less, King Soopers, Ralphs, Smith's Food & Drug, Fry's, Dillons, QFC and City Market. In April, the chain announced the acquisition of 18 Scott's Food & Pharmacy stores in Indiana from Supervalu.