Market Basket Signs Will Be Going Up Again : Boys Markets Changing Names of Some Stores

Boys Markets has renamed 17 of its suburban food stores Market Basket, a banner familiar to Southern Californians who recall when Kroger years ago operated a 66-store chain by that name in the region.

“We changed the name . . . to reflect a different marketing direction (and) a different customer base,” said Peter J. Sodini, president of Boys Markets, based in the Highland Park section of Los Angeles.

Boys has focused in recent years on urban, ethnic areas that have been abandoned by such major grocery chains as Vons, Lucky and Ralphs. In the process, however, it also has become known for charging higher prices than its big rivals, and lately its market share has eroded.

Shopper Traffic Slipped

Shopper traffic at Boys slipped in 1988 to 4.3% of the Los Angeles and Orange county markets from 4.8% the year before, according to a survey by the Los Angeles Times Marketing Research department.

In a letter to suppliers, Boys said the shift to Market Basket in suburban locations is a prelude to a corporate name change to Quality Foods International. The change will be made gradually, Sodini said, and will “reflect the diversity of formats and names that are now used.”

A 68-store company, Boys also operates under the Viva Mart name in heavily Latino areas and uses Cala Foods and QFI in Northern California. In addition, the company noted in its letter that it plans to buy the six Bell’s stores in the Bay Area. Sodini said in a telephone interview that the company will offer a slightly different selection of products and some lower prices in the suburban Market Basket locations, where security and real estate costs are lower than in urban areas. “We aren’t running away from urban areas,” he said.

A Boys mailing to customers about the Market Basket format indicates that Boys plans to offer items of “special value” under the QFI house brand. Many grocery chains offer such private-label items at prices well below those of comparable national brands. Such products are often produced by the chains themselves or are bought directly from manufacturers, making them more profitable.

The name Boys has occasionally caused the company some public relations hassles. A few years ago, many customers complained when Boys promoted itself with the slogan “Boys Loves Girls.”

Following Vons’ Strategy

In 1982, Kroger sold the 65-store Market Basket chain it had operated for several years in the Southland.

A spokesman for the Cincinnati-based supermarket giant said Boys paid a small fee to Kroger for rights to the Market Basket name.

In promoting itself under several different banners, Boys is following a strategy used successfully by Vons Cos., based in El Monte. In addition to its Vons supermarkets, that company operates Tianguis, a Latino format; big combination stores called Vons Food and Drug, and upscale, service-oriented groceries called Pavilions and Pavilions Place. Operating under different formats “makes a lot of sense given the diversity in the L.A. marketplace,” said Sarah A. Stack, first vice president at the Los Angeles investment firm of Bateman Eichler, Hill Richards.

Compton-based Ralphs Grocery, on the other hand, recently converted its Giant super-warehouse store concept to the Ralphs logo after failing to effectively develop a separate identity for the bigger stores. The company said the combination allows it to save millions of dollars in advertising costs.

Sodini confirmed that Boys is “in the very early stages” of negotiating a merger with Yucaipa Cos., a Claremont investment firm.

A Yucaipa partnership also has a stake in Craig Corp., a Los Angeles company that owns half of the Stater Bros. grocery chain.

Boys was bought last year for $131 million by Breco Holding Co., a subsidiary of American Breco, which is the U.S. arm of a food company owned by the Brener family of Mexico.