Metro boss pleased by sale

Ryder says new owner will underwrite growth

Grocery industry

June 11, 1999|By Mark Guidera | Mark Guidera,SUN STAFF

John Ryder, the energetic, hands-on president of the fast-growing Metro Food Market chain, said yesterday that SuperValu Inc.'s purchase of Metro's parent company should boost Metro's expansion efforts in the Baltimore-Washington area.

"We'll see more capital for expansion of the Metro chain," he said.

Ryder said specific expansion plans are not clear at this time.

SuperValu, which netted $191 million on $17.4 billion in sales last year, has holdings concentrated in the Midwest, where it has about 345 stores.

The company operates some stores under the Shop 'n Save banner in Pennsylvania.

In making the purchase announcement Tuesday, SuperValu executives said Richfood Holdings Inc., Metro's parent company, gives SuperValu a strong springboard into the mid-Atlantic retail market, where it has no presence.

Rita Simmer, a SuperValu spokeswoman, said the company's chief executive officer, Michael W. Wright, believes that the Baltimore-Washington market and Hampton Roads region in Virginia represent fertile ground for the company's efforts to open new stores and boost retail growth.

Richfood, which also operates stores under the Farm Fresh and Shoppers Food Warehouse banners, netted $55 million last year on sales of $3.2 billion.

Its Metro division has 18 grocery stores open in the competitive Baltimore-Washington market, with five others planned, making it the No. 3 grocery chain in the region behind Giant Food and Safeway.

"This is a very good acquisition for us; it fits right in line with two of our top corporate goals -- growing our supply business and growing our retail business," Simmer said.

She said it is too early to discuss new store or growth plans for the Metro chain.

The companies hope to close the deal by late September, Simmer said. SuperValu's purchase of Richfood Holdings Inc., a Richmond, Va.-based food wholesaler and retailer, is yet to be approved by Richfood shareholders.

The deal involves $1.5 billion in cash and assumption of debt, or about $18.50 a share.

If the deal is approved, SuperValu expects to close Richfood's executive offices in Richmond, Simmer said. The 20 executives working out of that office will be offered either new jobs in Minneapolis or severances, she said.

Yesterday, Ryder said he will continue to head up the Metro Food Market chain.

A former A&P Food executive, Ryder has captained Metro's big expansion into the Baltimore-Washington market since the former Basics chain was sold by Rite Aid to Richfood in 1995. At that time, there were seven stores.

With Richfood's backing, Ryder altered the Basics warehouse concept by creating the larger Metro format and adding fresh produce, meats and seafood to attract customers.

The executive also embarked on a plan to expand store sites, and he has recently championed the company's move into the pharmacy business by opening three Metro Rx sites.

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