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INDEPENDENT OWNERS EYED FOR 6 JUBILEE STORES

The six corporate-owned Jubilee markets in the Buffalo area and others in nearby regions are up for sale.

Joseph Scrivo, director of human resources for Fleming Cos.' New York division, based in Cheektowaga, confirmed Monday that the nation's No. 2 food wholesaler is seeking independent owners for 35 company-owned Jubilee supermarkets in New York and Pennsylvania, plus seven Festival stores in Pennsylvania.

"Our intention is to sell these stores to independent retailers to own and operate, and Fleming would continue as their supplier through our Buffalo and York, Pa., warehouses," Scrivo said.

He said it is in the best interests of both shoppers and the grocery wholesaler that the stores stay open and prosper.

"The goal is to sell them to strong independents who will continue the growth we've begun with all the units. That's in our best business interest as a supplier, and that of our loyal customers," he added.

Oklahoma City-based Fleming has set no "drop dead" date for the transfer of the markets, according to Scrivo, allowing itself time to locate the strongest potential owners.

"In the best of worlds, the transition will be so smooth that customers won't notice the ownership change. They'll find the same products and people they'd come to know," he said.

Affected Jubilee food stores in the Buffalo area are at: 4233 Lake Ave., Blasdell; 3870 Harlem Road, Cheektowaga; 416 Kenmore Ave., Buffalo; 535 Division St., North Tonawanda; 690 South Ogden St., Buffalo; and Route 98 & Prospect St., Attica.

The remaining corporate-owned Jubilees are scattered from Westfield to Horseheads across New York State, with more stores located in northern Pennsylvania.

For Fleming, the role of supermarket supplier is actually a more comfortable one than that of retail operator. The food giant delivers groceries to about 3,000 food stores in 42 states. It owns 260 of its own markets.

Similarly, its Cheektowaga food-distribution center services about 200 retail outlets, including 10 independent markets that use the Jubilee name.

Scrivo said Fleming has been quietly selling its company stores to independents during the last year, with eight units in the Southern Tier and Pennsylvania making the transition from corporate ownership to independent status.

"All eight are open and operating successfully," he said. "That's the future we envision for rest of the corporate units."

The move away from hands-on retailing in New York and Pennsylvania is a smart one from a business standpoint, according to food industry consultant Burt P. Flickinger III.

"I think it will ultimately make Fleming a stronger company to concentrate retail ownerships in markets where it can dominate. Elsewhere, they can make money through wholesale," he said.

Flickinger, whose family operated the S. M. Flickinger food company that formerly controlled many of the affected Jubilees when they were Super Duper stores, said the key to a successful transition would be to find strong owners to take over the stores.

"The trick will be to forge owner-supplier relationships which benefit the franchisees. Ideally, a 51-49 partnership, like my great-grandfather used, would allow store managers to become owners," he said.

Along those lines, Scrivo said, ideal candidates for the store buyouts are current Jubilee managers who have experience with Fleming and solid day-to-day experience in supermarket operations.

While he expects Fleming to be successful in keeping most of the stores alive through franchising, Flickinger said, the few that are not bought out would make attractive acquisitions for Save-A-Lot. That limited assortment discount chain has made inroads in Western New York in the last few years with its small, deep-discount format food stores.

Fleming acquired the Jubilee stores when it bought out competitor Scrivner Inc. in 1994.

Facing tough competition from market leader Tops and No. 2 Wegmans, Jubilee has scored points with Buffalo-area consumers looking for an alternative to large-format supermarkets with its smaller, easier-to-shop stores.

Once in a head-to-head battle with similar-size Quality Markets for market share, Jubilee was preferred by 24 percent of shoppers in a recent survey, compared with 18 percent that prefer Quality.

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