The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1997, Landmark Communications, Inc.

DATE: Saturday, January 25, 1997            TAG: 9701250303
SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 
SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER 
                                            LENGTH:   63 lines

FARM FRESH TO OPEN ``3 STORES, 1 ROOF'' NEAR GREENBRIER MALL

Farm Fresh Inc. plans to up the ante in the battle for grocery shoppers' dollars by unveiling three separate stores - a Rack & Sack food warehouse, an Open Air Fresh Market and a drugstore - in one giant building.

Called ``3 stores, 1 roof,'' the first outlet will open in spring across the street from Greenbrier Mall in Chesapeake. At 90,000 square feet, it will be about twice the size of a traditional grocery store in Hampton Roads.

``What we're building here and opening in the spring is the best of what we have done,'' Michael Julian, chairman and chief executive officer of Farm Fresh, said at a press conference Friday in Norfolk.

The stakes are high.

Norfolk-based Farm Fresh is struggling under a mountain of debt from its leveraged buyout in 1988. The chain is feeling the pressure as well-financed competitors, such as Hannaford Brothers Co. and Harris Teeter, continue to move into southeastern Virginia.

But Julian isn't afraid of matching up against those rivals. His ``3 stores, 1 roof'' outlet will be close to a new Harris Teeter off Greenbrier Parkway.

Ruth Kinzey, a spokeswoman for Matthews, N.C.-based Harris Teeter, said the company's new store has been doing well. She declined to discuss the impact of Farm Fresh's future store on the Greenbrier Harris Teeter.

A spokeswoman for Scarborough, Maine-based Hannaford said she wasn't familiar with Farm Fresh's plans.

At one end of the ``3 stores, 1 roof'' store, shoppers will find an assortment of tiny shops, including a Baskin Robbins ice cream store, a tobacco center, a one-hour photo center and a coffee bar.

Customers also will be able to take their children to a baby-sitting area, make transactions at a Central Fidelity bank, send flowers at the floral section or choose from a selection of wines.

Local shoppers probably are familiar with Rack & Sack discount stores, which sell grocery products in bulk and in a warehouse format. But the two other stores - Open Air Fresh Market and Drug Store Plus - will be new to Hampton Roads residents.

In the Fresh Market, customers will find a fruit and vegetable market, bakery, deli and seafood section. Drug Store Plus will include a pharmacy, health care products and upscale cosmetics.

Farm Fresh has been developing the new store's format for more than a year, testing ideas at Rack & Sacks in Roanoke and Richmond. But expansion plans for this new store format may have to wait. Julian would like to eventually open six of the giant stores in Hampton Roads and more in other areas, but he acknowledges that money is tight.

In December, Farm Fresh said it had hired a New York investment banking firm, Donaldson, Lufkin & Jenrette Securities Corp., to explore ``strategic alternatives.''

Julian has declined to elaborate on the company's prospects. But retail analysts have said that the company needs to find money - and quickly - so it can make interest payments on its heavy debt, $260 million as of the quarter ended Sept. 7, 1996. ILLUSTRATION: Artist rendering courtesy of Farm Fresh

The giant store will open in spring. Tentative plans call for the

opening of six more of the stores in Hampton Roads.

GRAPHIC

[For a copy of the graphic, see microfilm for this date.]


by CNB