On Sale at Safeway: Older, Smaller Stores : From Fontana to Thousand Oaks, 24 to Close; Reactions Are Mixed

Antonio Ramirez, standing next to his grocery cart in the Highland Park Safeway store at lunchtime Monday, looked dismayed when he heard that the store would close next month.

“No wonder they’ve got so many specials,” Ramirez, who lives nearby, said as he looked around at a number of yellow tags marking sale items. “We do all our shopping here. (Now) we’ll have to look around for a while at other stores.”

Safeway customers and employees alike expressed surprise on hearing that the store at Avenue 56 and York Blvd. is one of 24 Southland locations that the supermarket company plans to close and attempt to sell. One employee said she heard of the closing Monday morning from customers who had read newspaper reports over the weekend, but she said the store still has not been officially notified by the company.

For the most part, customers shrugged off news of the closing, indicating that they would simply take their business elsewhere--a Boys Market a few blocks away or even the much spiffier, larger Safeway a couple of miles away.

That newer store represents a push by the Oakland-based company toward larger locations of 40,000 square feet or more that can accommodate delicatessens, salad bars, pharmacies, video rentals and other services for which customers are clamoring these days.

“We’ve been evaluating our stores for quite some time,” said Bonnie Lewis, a spokeswoman for Safeway’s Southern California division, which now has 200 stores. “These older, smaller stores simply are not able to provide that service that our customers have come to expect.

“Some are in minority areas, some are not,” she added. “There is no thread except for the fact that they are older, smaller and unprofitable.”

Lewis disputed reports based on information from union sources that as many as 800 employees would lose their jobs as a result of the March closings.

“Our figures show that it may go as high as 500,” including some jobs to be eliminated March 28 when the company consolidates its National City warehouse and trucking operation with a facility in Santa Fe Springs. She added that all layoffs, which will represent about 4% of the current Southern California work force of more than 12,000, will be according to seniority.

In addition to the Highland Park store, the company will close two locations each in Bakersfield and San Diego, and one each in Bell, Canoga Park, Corona, El Monte, Fontana, Granada Hills, Hawthorne, Huntington Park, Lomita, National City, Newhall, Orcutt, Oxnard, San Gabriel, Saugus, Simi Valley, Taft, Thousand Oaks and Van Nuys.

Eastdil Realty, a San Francisco real estate office that is negotiating sales of the stores, would not comment. However, Jack H. Brown, chairman of Stater Brothers in Colton, said his company is evaluating the locations and might consider buying a few of them.

Older Stores Not Competitive

Ken Johnson, a consultant with Price Waterhouse in Los Angeles, said the closings are “exactly what I would have expected. Almost all the big-chain competitors have found that their smaller, older stores are not competitive.”

He added that Safeway’s $4.2-billion buyout by the investment banking firm of Kohlberg Kravis Roberts & Co., which loaded the company with debt, “may have hastened the (closing) process somewhat, but the overall rationale is basically the same, post-buyout or pre-buyout.”

At least one competitor near a doomed Safeway is hoping his business will benefit. “We expect and hope to get some increased volume from their closing,” said Don Hall, owner and manager of Hallmart Foods in Taft, a town that has suffered from the decline in oil prices.

Interestingly, Hall’s father, who founded the family’s independent store about 50 years ago, worked as a meat supervisor for Safeway after moving to Taft in 1932.