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KROGER TO MERGE WITH PAY LESS SUPER MARKETS INC. IN INDIANA
CINCINNATI, OH, December 1, 1999 -- The Kroger Co. (NYSE: KR) and Pay Less Super Markets, Inc. today announced they have reached an agreement under which Kroger plans to purchase the eight Pay Less grocery stores in the Indiana communities of Anderson, Lafayette and West Lafayette for an undisclosed amount of cash.
Subject to a final contract, both companies expect the transaction to be completed by early next year. The eight supermarkets, which will continue to operate under the Pay Less name, will become part of the Central Kroger Marketing Area (KMA), headquartered in Indianapolis. Kroger currently operates 94 stores in Indiana.
"We're delighted to welcome Pay Less and its employees to the Kroger family," said Don Becker, president of the Central KMA. "This merger will open several new markets for us as we continue to expand our business in Indiana."
Mr. Becker said Kroger plans to remodel the stores following completion of the transaction. The Company also plans to continue the same business hours, basic services and policies to which Pay Less shoppers have become accustomed. No change in employment level is expected at the Pay Less stores.
"It is evident to me and my family that now is the right time to place our life's work into the hands of a company that has the ability to lead Pay Less and its employees into the next century," said Larry D. Contos, president and chief executive officer of Pay Less. "
"Although this was obviously a difficult and emotional decision, it is the correct business decision for the future of Pay Less, its associates, our customers and the communities in which we operate. I believe our employees will have greater opportunity for advancement within Pay Less and Kroger. Being concerned and supportive corporate citizens of the Anderson and Lafayette areas has always been extremely important to us. I believe Kroger will continue the Pay Less legacy of community involvement. Kroger has become a leader in the grocery industry in every way, treating their associates and customers with the same values that have become synonymous with the Pay Less name," Mr. Contos added.
Under the agreement, Kroger will only acquire Pay Less' supermarket operations. None of the related Pay Less real estate holdings, including Applewood Centre and Cross Street Market Place in Anderson and Lafayette Plaza South and Tippecanoe Court in Lafayette, will be affected.
Pay Less founder H.J. "Bud" Contos opened the first Pay Less Super Market in 1947 at the corner of 29th and Main streets in Anderson. Pay Less expanded to Lafayette in 1960. Following the death of Bud Contos in 1961, his son, Larry, succeeded him as president of Pay Less while still a student at Indiana University. Under his guidance, Pay Less Super Markets has grown into an eight-store company, with more than 1,200 employees.
Pay Less has long been an integral part of Anderson and the greater Lafayette area. Larry Contos is recognized as a leader in the grocery industry and his community. In 1995, The Herald-Bulletin in Anderson named him "Person of the Year" for his business and personal contributions. In 1996, Contos served as chairman of the National Grocers Association.
Five additional Contos family members also have devoted their careers to Pay Less Supermarkets: Dixie Contos, Kim Contos, Courtney Contos, Colin Contos and Meredith Contos-McCord. "I am and will always be proud of the business that my family and my Pay Less family have built together," Mr. Contos said. "I am confident that the Pay Less name will continue to thrive."
Headquartered in Cincinnati, Ohio, Kroger is the nation's largest retail grocery chain. The Company operates 2,192 supermarkets and multi-department stores in 31 states under more than a dozen banners, including Kroger, Fred Meyer, Ralphs, Smith's, King Soopers, Dillon, Fry's, Food 4 Less and Quality Food Centers. Kroger also operates 796 convenience stores, 380 fine jewelry stores and 42 food processing plants.
Media: Gary Rhodes
Investor Relations: Kathy Kelly
Pay Less Super Markets Contact:
Media: Dixie Contos
||From: Corporate Affairs Department
The Kroger Co.
1014 Vine Street
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