August 9, 1997
Virtually all of Schnucks' 900 associates working in its Kansas City stores will be offered comparable positions with Hy-Vee.
"We appreciate the dedication of our Kansas City employees since we entered the market in 1991 and the opportunity to serve our Kansas City customers. While it's difficult to make the decision to leave the area, we realized we were at a crossroads with two options," said Craig D. Schnuck, chairman and chief executive officer. "One was to make a substantial investment in new stores and sales promotion to expand our Kansas City presence in order to reach a sufficient size and scale to be profitable. The other was to see if another supermarket operator might want to grow by buying our operation."
Two other factors contributed to Schnucks' decision to sell. One was the over-stored condition of the Kansas City grocery market, and the tendency of local supermarket operators to build stores in growth areas before the surrounding population is large enough to support a profitable operation. The other was the high cost of transporting products from Schnucks' St. Louis warehouses to its Kansas City stores. Those costs are significantly higher on a per-item basis than in most of Schnucks' other markets.
Schnucks received a strong response from potential buyers, and pursued discussions with the highest bidders this summer.
"We decided on Hy-Vee's offer because it makes everybody a winner. Our outstanding employees will retain their jobs, our customers will continue to have great stores in which to shop, and we are able to recoup our investment," Schnuck said. "We'll use the proceeds to fund our ongoing expansion in other markets."
Scott C. Schnuck, president and chief operating officer, added, "We're confident our employees will be joining a well-managed and progressive company with solid Midwestern values similar to our own. Hy-Vee offers a bright and secure future working in stores where customers come first."
Schnuck Markets, Inc. is a family-owned supermarket company operating 94 stores in Missouri, Illinois, Kansas and Indiana. Following the sale of its Kansas City operations, Schnucks will operate 87 stores in Missouri, Illinois and Indiana.
Johnson County, Kan.
Blue Valley Schnucks at 119th and Switzer in Overland Park, Kan.
Metcalf Schnucks at 93rd and Metcalf in Overland Park, Kan.
Shawnee Schnucks at 64th and Quivira in Shawnee, Kan.
Lenexa Schnucks at 87th and Pflumm in Lenexa, Kan.
Olathe Schnucks at 135th and Lur-Len in Olathe, Kan.
Stateline Schnucks at 79th and Stateline in Prairie Village, Kan.
Raytown Schnucks at Highway 350 and Gregory Boulevard in Raytown, Mo.
Hy-Vee has an option to purchase land from Schnucks at the undeveloped location in Independence, Mo. at Interstate 70 and Lee Summit Road.