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Safeway to Sell 24 Southland Stores; Layoffs Seen

February 22, 1987|From Associated Press

Safeway Stores Inc. has decided to close and sell 24 Southern California supermarkets in a move that could put up to 800 people out of work, union officials said.

Bonnie Lewis, a spokeswoman for the Oakland-based chain, confirmed Friday that the stores have been put up for sale and that Safeway hopes to close them before the end of March. Twelve other Safeway supermarkets that are already closed or vacant are also up for sale. The chain has about 200 stores in Southern California.

Lewis said many of the stores targeted for closure were built in the 1960s and early 1970s and have 25,000 square feet or less. The firm has been updating its supermarkets by building newer, larger stores that have room for delicatessens, salad bars and pharmacies, she said.

Union officials, however, blamed the closings on Safeway's $4.2-billion takeover by the investment banking firm Kohlberg Kravis Roberts & Co. The acquisition gave the firm a heavy debt load, which it is trying to pay off by selling assets, said David Barry, a regional vice president for the United Food and Commercial Workers union.

"There's going to be layoffs," said Bill Sauriol, president of the union's Riverside-San Bernardino local, adding that up to 800 people could lose their jobs. "The least senior people will end up laid off."

Rick Icaza, president of the union's 31,000-member local in Los Angeles, said the union expected Safeway to close some stores in Southern California.

"It doesn't shock me," he said. "They have a lot of debt service, there is no question about it. . . . It is another example of what happens when you have a buy-out. The ones who pay are the employees and the consumers."

Many analysts predicted Safeway would sell under-performing stores to reduce its debt levels after the November takeover. A San Francisco real estate office, Eastdil Realty Inc., has been selling the stores to other grocery chains and real estate brokers.

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