Safeway Inc. (SWY) said it intends to exit the Philadelphia market as it agreed to sell 16 Genuardi's stores to Ahold USA's Giant Food Stores unit and plans to close or sell its remaining Genuardi's stores.
"We have made the decision to exit the greater Philadelphia market, including four stores in New Jersey, and focus our resources in those operating areas where we have a stronger presence," said Steve Neibergall, president of Safeway's eastern division.
Financial terms of the Giant Food deal weren't disclosed.
Safeway said it will close the three Genuardi's stores located in Exton, Norristown and Royersford.
The supermarket operator is working with potential buyers to sell its eight remaining Genuardi's stores.
Safeway--which operates regional chains such as Vons, Randalls, Tom Thumb and Carrs--has tried to offset rising wholesale-food and commodities costs by selling more of its private-label products and controlling costs. The company reported in October its third-quarter earnings rose 6% as higher fuel sales helped boost revenue, though margins slipped.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283; email@example.com