Fleming Cos. is selling 11 of its ABCO supermarkets in the Phoenix and Tucson areas to Safeway in a deal with an undisclosed price. Fleming, which is primarily in the food distribution business, is negotiating with buyers for the chain's remaining 40 Arizona stores. Possible buyers are Bashas', Albertson's Inc. and Southwest Supermarkets.

The transaction with Safeway includes three stores in Phoenix, seven in Tucson and one in Glendale. The stores were relatively new and larger than the older locations.

Retail experts had predicted that a sudden glut of grocery store space could cause retail vacancy rates to rise slightly this year, so some of that space would be converted to other uses.

In September Fleming Companies Inc. began offering to sell dozens of ABCO Foods locations throughout the state as part of a company restructuring. At the same time, Kroger, owner of Fry's and Kroger stores, expected to close on a number of Fry's Food stores in the coming year. Kroger completed the purchase of Smith's, Smitty's and Fry's last year and plans to close duplication locations and smaller stores.

Buyers are likely to go after stores with the largest floorplates, which most new stores possess. The older stores may not be sold to grocery store chains at all and will be converted into other uses. A number of retail stores in the Valley are being used for back office space.

The overall vacancy rate for retail space in the Valley is approximately 4.5%, but fourth-quarter numbers have yet compiled. The six million sf of space now under construction is mostly preleased and shouldn't cause the vacancy rate to rise significantly.

The steady influx of 100,000 new residents annually into the Valley and residential housing in new areas has pumped up retail development. With the East Valley nearing build-out in several suburbs, new housing development and, consequently, new retail, has moved to the West Valley, North Scottsdale and further south into Chandler. <

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Supermarket Glut Eased by Sale of ABCOs to Safeway

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