Contact: Lori Willis

Director of Communications

314-994-4602

Sept. 24, 2004

Schnucks Will Close East St. Louis Store on Oct. 9

EAST ST. LOUIS, Ill. -- Leaders of Schnuck Markets, Inc. today announced that the East St. Louis Schnucks store located at 2511 State Street would close Saturday, Oct. 9 at 6 p.m. All 103 store associates will be offered transfers to similar positions with comparable wages and benefits. Those who opt not to transfer will be paid for all earned vacation and personal days and, if eligible, will receive extended healthcare and pension coverage for three months. Long-time Store Manager Ken Hall, a key leader in the community, will receive a new assignment to a management position with another of the company's metro east locations.

The announcement of the store closing followed weeks of discussions and negotiations with union leaders, city officials and developers all of whom, Schnucks leaders say, were integral parts of a potential solution. Craig D. Schnuck, chairman and chief executive officer, said, "Although there were good faith gestures all the way around, we just couldn't get it all to come together in a way that would justify continued operation."

Schnuck added, "We appreciate our loyal customers in East St. Louis. They were the focus of our efforts over the past several months as we researched options that would enable us to keep the store open." However, according to Schnuck, the already ailing store suffered a one-two punch when city officials granted tax relief to subsidize developments for non-union competitors Walgreens (June 1999) and Sav-A-Lot (April 2000)."

"While the decision was well intended and designed to bring more business into the area, this action caused sales declines that pushed our store into major operating losses. We must now consolidate our east side operations," said Schnuck. "Ken Hall and his store team have served the community exceptionally well. However, given our present situation, we all know that there is no way the store can survive. There are simply not enough customers to go around."

Schnuck added, "Following the expiration of our lease on Aug. 14, we've been operating month-to-month in order to buy time to research options. All along we emphasized it was imperative that we get relief from burdensome lease terms and labor costs that greatly exceed those of the area's non-union retailers."

To date, neither city nor state officials have offered requested assistance. Although leaders of the United Food and Commercial Workers (UFCW) Union and Schnucks have discussed options for relief, no agreement has been reached. Schnuck explained, "We do appreciate the attention everyone has given to this effort; however, it was imperative that we get relief in several different areas. Unfortunately, we weren't able to make everything happen."

According to Schnuck, increasingly heavy competition, rising labor costs and a sluggish economy have forced the company to make tough decisions in order to remain competitive. (Schnucks encountered similar situations when leasehold interests expired at its Clayton store last year and its Delmar/Kingshighway location in April.)

"Closing a store is a very difficult aspect of our business, and we don't make these decisions lightly. However, our focus must remain on keeping prices down for our customers. In order to do that and to preserve our business for the future, we must operate as efficiently as possible," said Schnuck.

In the coming weeks, customers will notice signs alerting them to the store close. Pharmacy customers can call 618-624-4313 to request that their prescriptions be transferred to a pharmacy of their choice. All pharmacy accounts not transferred by Saturday, Oct. 9 will be automatically transferred to the Fairview Heights Schnucks pharmacy (618-624-4313) just off Interstate 64. The Schnucks Cahokia store is also an option for pharmacy customers (618-332-0676).

The 32,490-square-foot East St. Louis store opened as a National store in 1989. Schnucks acquired it as part of the National acquisition in 1995.

Family-owned Schnuck Markets, Inc. was founded in 1939 and currently operates 101 stores (including five Logli stores) and 94 pharmacies in Missouri, Illinois, Indiana, Wisconsin, Tennessee and Mississippi.

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