Independent IGA grocers have purchased 19 of the 33 stores that ABCO had up for sale in the southwest. The first stores being converted into IGA markets are in four locations in the Valley and six in Tucson, says Jim Tooms, president of the Phoenix-based IGA West Group. The stores will be converted sometime this year. The sale price for the stores was not disclosed.
IGA hopes to close on the purchase of the other nine stores in the next few weeks, Tooms says. Until this sale, IGA had just one store in the Valley, a Sun Foods outlet in Sun City and 20 others throughout the state.
The Fleming Cos., a Dallas-based grocery distributor, put the ABCO chain up for sale last April along with other conventional supermarket chains it has around the country, as part of its strategic plan to remove itself from the grocery retailing business. The company had 56 ABCO stores in the state.
"We are weeks away from getting the process pretty much cleaned up," Mark Hansen, Fleming CEO, told stock analysts earlier this week. "We are going to close a few stores that frankly don't have good economic utility."
Real estate experts worried that the sudden glut of retail space would drive down rates or leave some centers without anchor tenants. Experts also expected that several of the locations would be converted for other uses, perhaps as office space or back office use.
But the sale and conversion of the stores into other grocery anchors has been brisk. Since beginning to sell the stores, Fleming has sold 11 ABCOs in Arizona to Safeway and closed another dozen. With the sale to IGA, which is a collective of independent grocers that buy together in bulk, Fleming now has just 14 stores to unload in the state.
Southwest Supermakets, another Phoenix-based retailer, is rumored to be interested in some of the remaining stores, so too is Western Farms Marketplace, a single store in south Phoenix.
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