Some Farmer Jack Stores Said to Be Sold to Kroger and Spartan

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Some Farmer Jack Stores Said to Be Sold to Kroger and Spartan

MONTVALE, N.J. -- The Great Atlantic & Pacific Tea Co. here could sell 47 of its 66 Detroit-area Farmer Jack stores as soon as next week in a multipart deal, according to a local press report.

The Detroit Free Press reported that Kroger would buy 25 of the stores, while the remaining 22 would be acquired by independents operating under the Spartan banner and another supermarket chain. Nineteen locations are without a buyer.

Wisconsin-based grocery analyst David J. Livingston told the paper that since A&P didn't receive the bids it wanted for the 19 stores, the result could be "a lot of job loss." If nonunion companies were to buy the stores, employees could face pay cuts and benefit losses, he added.

The stores' expensive leases have proved to be problematic, according to Livingston, who says he has heard from clients that the rents are prohibitively costly. Store buyers would either have to assume the leases or sublease from A&P.

Pharmacies at some Farmer Jack stores are already reportedly closing, and the company's distribution center is slated to cease operations by mid-June.

A&P said last month it would sell the stores because of their poor financial performance in the challenging Detroit market.