DATE: Saturday, September 27, 1997          TAG: 9709270344

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 
SOURCE: BY MIKE ABRAMS, STAFF WRITER 
DATELINE: VIRGINIA BEACH                    LENGTH:   87 lines

GROCER GROWS LOCAL ROOTS

She lives across from a Farm Fresh, but Kim Brown considers herself a devoted Hannaford shopper.

A year ago, the 42-year-old Beach woman started driving across town to shop at the Hannaford Food and Drug Superstore near the intersection of Independence and Virginia Beach boulevards. She kept it up.

Then, when Hannaford Bros. Co. opened a Hilltop store earlier this month, Brown took her fledgling loyalty and checked out the more convenient location near her home. She was sold.

``It's bright, it's clean, they have good prices, they have variety,'' she said. ``They have nice produce, nice fish and cheap toilet paper.''

That's exactly what Hannaford officials hoped to hear when they entered the Hampton Roads market in November 1995. And it's fueling the Scarborough, Maine-based supermarket chain's rapid expansion as it approaches its two-year anniversary in the region.

The Fortune 500 company - which conducted $2.9 billion in sales nationally last year - operates four stores in Virginia Beach, one in Norfolk and one on the Peninsula. The company will open one in York County, one on High Street in Portsmouth and another on Providence Road in Virginia Beach in 1998. It also intends to build at least two more area stores next year.

That would bring the total to 11 stores in three years - a figure the company wants to increase with stores in Chesapeake, where it has struggled to find the right property.

``We are encouraged by what we've seen,'' spokeswoman Susan Pierter said. ``Certainly, we are investing in new stores, and we will continue to do that.''

Hannaford doesn't break down its sales statistics by region. Pierter said the chain's infusion of stores and hundreds of jobs speak for themselves.

Beach officials excitedly point to the chain's tax bills on land, buildings and personal property as another benefit. The bill: between $80,000 and $90,000 per store, per year.

``They are just going gangbusters and building new stores,'' said Robert Ruhl, the business development manager in the city's Economic Development Department. ``They did their homework and are seeing results.''

Hannaford entered the region just as the grocery sector of the economy - led by Food Lion and its 67 local stores and Farm Fresh - was about to change.

Matthews, N.C.-based Harris Teeter had announced plans to open the first of its upscale stores, which it did in 1996. Both Kmart and Wal-Mart have opened combination discount and grocery superstores.

Intensifying the battle this summer, Richfood Holdings Inc., the distributor for debt-burdened Farm Fresh Inc., agreed to pay $250 million or more for the 47-store chain. Richfood plans to maintain the Farm Fresh Norfolk headquarters and spend millions updating stores.

Before arriving, Hannaford suffered a setback of its own.

Developers had planned to pair the grocer with Caldor Corp., a Norwalk, Conn.-based discount chain similar to Kmart, in several shopping centers. But Caldor filed for bankruptcy protection and halted its expansion into Hampton Roads.

Hannaford persisted. The company methodically opened stores ranging from 40,000 to 55,000 square feet, each featuring higher ceilings, wider aisles and broader selection than traditional local competitors.

Clearly, the chain set out to prove, bounty is better.

Store sections such as the ``Farmers' Market'' feature custom fruit baskets and hundreds of vegetables from around the world. The produce area has its roots in 1883, when brothers Arthur and Howard Hannaford opened a fruit and vegetable shop in Portland, Maine.

The stores also house meal centers with ``heat-and-eat'' foods and ``Nature's Place'' nooks packed with organic items, books and herbal treatments.

``Initially, people didn't know who we were,'' said John Vegas, the Hilltop store director and a company point person here since 1995. ``They may have been skeptical. As we've continued to open stores, we have been better and better received.''

Hannaford officials say they offer Harris Teeter quality at Food Lion prices, even if some shoppers say the price part isn't always true.

``All stores run specials,'' said Ken Whisler, 74, as he stuffed Hannaford bags into his trunk one recent afternoon.

Like others, though, he said he's drawn by the grocer's atmosphere.

``I shop here because it's a new place,'' he said. ``You get tired of the old stores.'' ILLUSTRATION: Color photo

DAVID B. HOLLINGSWORTH/Virginian-Pilot

Hannaford Bros. Co. entered the Hampton Roads market in November

1995. The Fortune 500 company is operating six stores in the region

now, and is planning to have 11 operating here by the end of 1998.

This Hilltop store on Laskin Road opened two weeks ago. KEYWORDS: HANNAFORD BROS. CO.

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