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William and Adelia Ayers shop at the Ukrop's store |
RICHMOND
--The Giant grocery store chain is buying Richmond-based Ukrop's, the two companies announced yesterday.But the Spotsylvania County store is one of two not included in the sale and will close early next year, according to Bobby Ukrop, the chain's CEO.
The other store not included is Joe's Supermarket in Richmond.
Ukrop said the Fredericksburg-area Ukrop's is surrounded by four Giant stores, and "it didn't make sense" for Giant to buy another one. The local store has been open about 12 years.
He expects the store to close in early 2010 and said Ukrop's will work with store associates to find jobs either in Richmond-area Ukrop's stores or at other grocery retailers in the Fredericksburg area.
The news, announced at a press conference in Richmond, ends months of speculation about a possible sale of Ukrop's, a locally owned company that over 72 years had grown from one small store to a chain of more than 20, mostly in the Richmond area.
Jim Ukrop, one of the brothers who took over the Ukrop's chain from their parents, said competition had increased over the years, with big-box stores, club stores and discount stores selling many of the same products. Ukrop's size made it difficult to compete with larger companies that had greater buying power, he said.
"Our size limits our ability to succeed in today's increasingly competitive market," Jim Ukrop said.
He added that while the Ukrop's stores were urged to open their stores on Sundays or sell wine and beer, he doesn't believe that would have made much of a difference.
"It was not a long-term solution for a retailer of our size," he said.
Bobby Ukrop said the decision to sell was hard.
"Leaving the grocery retail business was a difficult decision for our family," Ukrop said. "We concluded that now was the right time."
But he said it was made easier by Giant's focus on local vendors, employees and on contributing to the community.
"They are a lot like us--similar values, similar culture," he said.
Nearly all of the Ukrop's stores that Giant is buying include branches of First Market Bank, which is being merged into Union Bank & Trust in a roughly $105 million deal expected to close early next year.
The Ukrop's sale will not affect the First Market branches, according to a news release yesterday from Bowling Green-based Union Bankshares Corp., parent of Union Bank & Trust.
Union Bankshares considered the effect of a possible sale while doing due diligence on the First Market purchase and concluded it would not disrupt service.
"We look forward to working with Giant-Carlisle," Union Bankshares CEO G. William Beale said in the release.
Aside from the store here and the Joe's Supermarket in Richmond, Giant-Carlisle will keep Ukrop's store employees and locations, and even the name for the time being, said division president Rick Herring.
Herring said Giant will evaluate the Ukrop's stores and decide later what to change. Herring did not specifically address whether the stores would open on Sundays and sell beer and wine. Until sometime next year, at least, the stores will operate as they have been doing.
"Ukrop's brand is a well-loved and well-recognized brand. In Richmond, it's an institution," Herring said.
Bobby Ukrop also said the Ukrop's bakery will continue to operate and to sell food items, especially to the new Giant stores.
Ukrop's is being bought for $140 million by Ahold, an international company that owns Giant. It's based in the Netherlands. The sale is expected to close in the first quarter of 2010. The Ukrop's sale comes through the company's Giant-Carlisle division, headquartered in Pennsylvania.
That division already operates nine stores in Virginia under the name Martin's, including one that opened earlier this year in Culpeper.
Staff writer Bill Freehling contributed to this report.
