The company calls Austin a strategic growth market and plans to step up its spending from $4.8 million in 2001 to $19 million this year, $20 million in 2003, $44 million in 2004 and $24 million in 2005. Albertsons has 14 stores in Austin, where its been doing business since 1989.

Albertsons said in May that it would spend $184 million in two years to adds six new stores, eight fuel centers and remodel five stores in the Dallas-Fort Worth area. The big cash infusions in Dallas-Fort Worth and Austin come after the company abandoned the Houston and San Antonio markets, calling them poor performers.

"This significant investment in the Austin market clearly demonstrates that Albertsons is committed to growing in this area," says Albertsons vice president Scott Hay.

The spending plan sets up a food fight between Albertsons, which has stores across the country, and San Antonio-based H-E-B, which has 275 grocery stores distributed Austin, Houston and throughout South Texas. Additional competition will be provided by Randalls, which is owned by Safeway Inc.

H-E-B is the biggest player in Austin, with 22 stores in Austin and five in Round Rock as well as two Central Market stores. Randalls has eight Austin stores.

Austin is also home to Whole Foods Markets Inc., the largest natural food retailer in the United States. It is slated to build an 80,000-sf store and adjacent corporate headquarters on the edge of the city's CBD.

Instant Insights /

Albertsons Girds for $100M Food Fight

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