THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, October 25, 1995 TAG: 9510250472
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER
LENGTH: Short : 44 lines
Farm Fresh Inc. said Tuesday it plans to tuck Drug Emporium departments inside two of its Rack & Sack discount grocery stores in Richmond.
The mini-Drug Emporiums will open during the first week of November. They will occupy about 15,000 square feet of the 80,000-square-foot supermarkets.
The licensing agreement will give Norfolk-based Farm Fresh a chance to lower costs on many health and beauty aids, as well as offer a bigger selection, particularly in cosmetics.
Michael E. Julian, chairman and chief executive of Norfolk-based Farm Fresh, said he sees the agreement as a way to enhance Rack & Sack's reputation as a discount haven for grocery shoppers.
``While Farm Fresh has always operated drug stores within its grocery stores, we feel the affiliation with Drug Emporium will further strengthen the discount image we communicate to our customers in the Rack & Sack stores,'' Julian said.
For Drug Emporium Inc., based in Powell, Ohio, the move is a new way to grow. Earlier this week, the chain said it would purchase the assets of 22 drugstores in Detroit and Baltimore from F&M Distributors Inc.
``This is a new format for Drug Emporium, and we believe the one-stop shopping concept has great potential for both Drug Emporium and Farm Fresh,'' said David L. Kriegel, chairman and chief executive officer of Drug Emporium.
The deal was engineered by Keith Alessi, who holds top executive positions in both companies. He is vice chairman of Farm Fresh and treasurer of Drug Emporium.
Alessi said he does not know whether Drug Emporium outlets will be added to other Rack & Sack or even Farm Fresh stores.
``We're testing and they're testing,'' he said. ``We'll see how it goes.''
Drug Emporium operates 117 discount drug stores and franchises an additional 94 outlets. Farm Fresh operates 43 regular grocery stores and 11 Rack & Sacks. by CNB