Gelson’s Shops for Another Chain

Gelson’s Markets, an Encino-based supermarket chain, is looking for store sites and another grocery chain to acquire as part of an expansion.

Company president Bernard M. Gelson said he would consider buying a major chain but that he has not yet found any available at what he considers a reasonable price.

Gelson would not discuss his company’s other expansion plans in detail. But, as a first step, he said, the seven-store chain will soon sign a lease for an eighth Gelson’s, which, like all the others, will aim at the upscale market.

Century City Remodeling

The company recently completed a $4-million remodeling of its Century City store, and plans to spend $500,000 to set up a new delicatessen at its Encino store, he said.

Gelson’s is a division of the Compton-based Arden Group. Although financial results for the Gelson’s unit are not disclosed, an industry source said annual sales are in the $150-million range. The company had record sales and earnings last year, Gelson said.

Gelson’s began in 1951, when Bernard and his late brother, Eugene, paid $5,000 for a small grocery at Victory and Lankershim boulevards in North Hollywood. The Gelsons sold their business to Arden 20 years ago, but Bernard Gelson continues to run it under a management contract.

Last week, Gelson’s announced the departure of general manager Donald Lee, who resigned to take another job. He will be replaced by Allan Scharn, who has been with Gelson’s 25 years and most recently was the company’s chief buyer, Gelson said.

Gelson’s also announced the appointment of Robert Stiles as vice president for marketing, John Vitale as vice president for meat and delicatessen and William Roulette as vice president of operations. Gelson said all three were performing similar jobs but have been promoted to vice president as part of a management restructuring to prepare for expansion.

Fast-Growing Field

The upscale food business has grown much faster than conventional supermarkets have in recent years, said Kenneth Partch, editor of Supermarket Business, a trade publication. He explained that shoppers are more sophisticated about food, and young urban professionals have more disposable income.

Also, Partch said, selling gourmet and prepared foods provides stores a much higher mark-up than conventional, price-competitive supermarkets enjoy.

Besides Encino and Century City, Gelson’s has stores in North Hollywood, Tarzana, Westlake Village, Pacific Palisades and Newport Beach. Overall, the company has about 1,200 employees.