Contact: Marie McGeehan at Casey Communications, Inc., 314/962-0944 or Dee Wetzel at Schnuck Markets, 314/994-4608.

September 5, 2000

Schnuck Markets To Close Three Stores Due to Poor Sales and Increased Costs

ST. LOUIS – Schnuck Markets Inc. plans to close three St. Louis area stores experiencing low sales on Saturday, Sept. 16, and transfer 73 full-time and 184 part-time associates to other area stores. There will be no layoffs. Stores to close are located at 1030 Cass Ave. and 710 N. Kingshighway at Delmar Boulevard in the City of St. Louis, and the Schnucks Express store at 9445 Gravois Rd. in Affton.

“We are taking these steps after extensive, careful review,” said Craig D. Schnuck, chairman and chief executive officer. “After modernizing the stores following the National acquisition and offering top-quality products, great service, and making our operations as efficient as possible, none of these stores generates enough sales nor has enough customers shopping at these locations to pay for the increasing cost of running the stores.

“Our Cass Avenue store and our Delmar/Kingshighway store did not have strong sales when we took them over in 1995, and with continued city population declines, sales have continued to

decline. We had been reducing our operating losses each year in spite of the population declines.

The major cost increases of the recently negotiated retail clerks contract causes the projected losses to increase to unacceptable levels.

“Our Schnucks Express store does not get enough customers and sales to justify remaining open,” Schnuck said.

“We must curtail these losses so we can run a healthy company, meet increasing competition, ensure the viability of a locally-owned supermarket operator for our customers and associates, and maintain our ongoing support of the community. Store losses affect all our customers and associates. We regretfully have to close these stores,” Schnuck said.

Stores Continue to Experience Losses

Since 1995, the year Schnucks began operation of the National stores, the Cass Avenue store has generated losses of more than $4.6 million and the Delmar/Kingshighway store has incurred losses of more than $2.8 million. For the coming year, with the increase in operating costs facing the company, the Cass store is projected to lose more than $800,000, and the Delmar/Kingshighway store is projected to lose more than $600,000. Future plans for the new Mississippi River bridge will destroy the economic viability of the Cass location as a commercial retail location. “We have conducted extensive studies to relocate the Cass Avenue store and have been unsuccessful in finding a viable location,” said Schnuck. “There is not enough current or projected population to support a store of our type anywhere in the area.”

The Schnucks Express store in Affton has generated less than one-quarter the sales projected for this experimental concept despite extensive promotional activity. The store is projected to lose

almost $700,000 next year and must be closed.

“The increasing competition in the supermarket industry requires we change the way we provide service in these locations. We remain committed to the city, however, we need to consolidate our stores so we can continue providing top quality products, extensive variety and excellent service for customers in the communities we serve for years to come,” said Schnuck.

Shuttle Service From Downtown Store to Lindell Boulevard Store Begins Sept. 19

Schnucks plans to operate a shuttle service for customers from the Downtown store location to the Schnucks store at 4171 Lindell Blvd. The shuttle service will begin operating Tuesday, Sept. 19, and will operate Tuesday through Saturday, three round trips per day. Customers will be picked up at the Downtown store location at 10 a.m., Noon and 3 p.m. The shuttle will leave the Schnucks Lindell store and return to the Downtown store location at 11:30 a.m., 1:30 p.m. and 4:30 p.m.

Pharmacy Customers Can Transfer Prescription Records

All three stores provide pharmacy services. Pharmacy customers can call their respective pharmacies to request a transfer of records to their pharmacy of choice. Schnucks operates nearby pharmacies at all its stores in the City of St. Louis except the Hampton Village Plaza store. Schnucks also operates a pharmacy at its Affton store and all other South County locations.

Affected customers can request pharmacy record transfers by calling: (314) 621-4953 for Cass Avenue customers; (314) 361-1622 for Delmar/Kingshighway customers; and (314) 638-2883 for Schnucks Express customers.

If customers do not call their pharmacies by Sept. 16, their prescription records from the Cass Avenue store will be transferred to the Schnucks store at 4171 Lindell Blvd. Records from the

North Kingshighway store will be transferred to the Schnucks City Plaza store at 3431 Union Blvd. Schnucks Express customer prescription records will be transferred to the Affton store at 10070 Gravois Rd.

Other Nearby Schnucks Stores

Schnucks acquired the 41,000-square-foot Delmar/Kingshighway store in 1995 when it purchased National Supermarkets. Schnucks stores nearest to that location include a 53,000-square-foot store at 4171 Lindell Blvd (1.2 miles); a 63,000-square-foot store at 3431 Union Blvd. (1.8 miles); and the 27,000-square-foot store at 4127 North Grand Blvd. (2.7 miles).

Customers of the in-store Bank of America who have questions about their accounts should call Mary Dailey at (314) 466-3536 for information.

The 63,000-square-foot Cass Avenue Schnucks also was included in the 1995 purchase of National Supermarkets. Schnucks stores nearest to this location include the store at 4127 North Grand Blvd. (2.2 miles); the store at 4171 Lindell Blvd. (2.9 miles); and a 74,000-square-foot store at 3430 South Grand Blvd. (4.2 miles).

The 17,000-square-foot Schnucks Express store in Affton, the smallest of Schnucks stores, was the first store of its type and size, and introduced the smaller concept in an attempt to fill area customers’ needs for grocery products and services with features similar to a neighborhood corner market. The nearest Schnucks stores include a 50,000-square-foot store at 10070 Gravois Rd. in Affton (0.8 miles); a 44,000-square-foot store at 7450 Hampton Avenue at Gravois (1.7 miles); and a 52,000-square-foot store at 5434 Southfield Center (2.8 miles). The stores on Gravois Road and Hampton Avenue at Gravois currently are being expanded and remodeled.

“We had hoped the experimental format at Schnucks Express would be attractive to area residents. The response from the public was disappointing. However, we are recommitting ourselves to the neighborhood by expanding and remodeling our nearby stores,” said Schnuck.

Committed to the City of St. Louis

After Sept. 16, Schnucks will operate nine stores in the City of St. Louis. “We remain the only local supermarket owner/operator with stores throughout the city and are committed to continuing providing top quality supermarkets for city residents,” said Schnuck.

Schnuck Markets recently completed a $1.1 million renovation at its South Grand store. Schnucks invested $12.7 million in the 80,000-square-foot City Plaza retail center which opened in 1998. The development was the first new full-scale retail center built in North St. Louis since World War II. Preliminary planning is under way for remodeling at the store at Grand and Kossuth and the Lindell Boulevard store.

Schnucks Chairman Craig D. Schnuck served as co-chairman of a study by Initiative For A Competitive Inner City (ICIC), a not-for-profit organization whose goal is to pursue business development and jobs in the city. Schnuck currently is serving as the co-chairman of the St. Louis Inner City Competitive Alliance, which will implement the findings of the study.

“I have experienced first-hand the impact on business of the decline of population in the city. St. Louis Inner City Competitive Alliance is a real effort to maintain and create jobs, to increase the income and wealth of inner city residents, and to stem the population decline,” said Schnuck.

Plans for Locations

Schnucks leases the Delmar and Kingshighway location and owns the Cass Avenue location.

Schnucks Express opened in July 1999 and partially occupies a building acquired in 1995 from National Supermarkets. An Ace Hardware store, which opened in November 1999, occupies the remainder of the building.

Schnucks plans to search for tenants for these locations immediately through its affiliated real estate company, DESCO.

Schnuck Markets, Inc. currently operates 94 stores in Missouri, Illinois and Indiana. The family-owned company was founded in St. Louis in 1939.

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Editor’s Note: After Sept. 16, remaining stores in City of St. Louis include:

3431 Union Blvd. (63115)

4127 N. Grand Blvd. (63107)

4171 Lindell Blvd. (63108)

5055 Arsenal St. (63139)
3430 S. Grand Blvd. (63118)

60 Hampton Village (63109)

7450 Hampton Ave. (63109)

950 Loughborough Ave. (63111)

7057 Chippewa St. (63119)