Save Mart closing two Merced stores

A city that's struggled with poor grocery store access and unemployment could soon be getting more of both.

Save Mart Supermarkets announced Friday that it will shut down one of its three Merced stores and convert another to one of its FoodMaxx outlets. The third Save Mart, at 150 W. Olive Ave., will stay open.

The store at 1300 W. Olive Ave. will be converted to the chain's discount warehouse format after it closes June 1. The Save Mart at 1136 W. Main St., which opened in 1987, will close after the FoodMaxx opens.

The move was made because both the stores were struggling, said Alicia Rockwell, public affairs director for Modesto-based Save Mart Supermarkets.

"We certainly waited as long as we could, but we are currently assessing a lot of our different store locations and looking for opportunities to make them more profitable and make them fit the neighborhood," she said.

Rockwell wouldn't say exactly how many layoffs could come from the changes, but said there are fewer than 100 employees at the two affected stores.

She added that the workers will have options, including positions at the new FoodMaxx, which might open in early July, or openings at other stores in the area.

Any decisions about layoffs would come after it's determined which employees can be transferred, Rockwell said. "The potential is there based on the marketplace, but we're working very hard with our employees and with our union representative to try to mitigate that impact," she said.

Although Rockwell wouldn't confirm any layoffs, Save Mart employee Sarojani Prasad said they are coming.

Employees started hearing rumors Wednesday of stores closing, she said. Corporate officials met with employees Friday and told them some could be transferred to other stores, while others will be laid off. The decisions will be based on seniority.

"It's hard," Prasad said after she got the news Friday. "I hope, I hope they don't lay me off because my husband is not working."

For a city with an unemployment rate of 20 percent, local officials see any job losses as an unfortunate blow to hopes of economic recovery.

Mayor Stan Thurston said the closures compound already serious economic and employment problems in Merced, especially since most Save Mart employees earn union wages.

"It sure doesn't help," he said.

Thurston questioned why the store would be shut down when the economy is starting to pick up in some areas. "Unfortunately, we're getting too used to bad news, and we're doing everything we can to turn it around," he said.

While the site on Olive Avenue will be swapped out for a FoodMaxx, those who frequented the Main Street location will have to find another grocery outlet.

Many South Merced residents have expressed concerns over not having access to grocery stores in their neighborhoods, and removing the site from Main Street could further limit their options.

Frank Quintero, Merced's economic development director, said the city has been aware of coming changes to the stores. Merced has a reasonable resident-to-grocery store ratio but South Merced is lacking similar options, he said.

"We need stronger grocery store presence in South Merced, especially in the southwest portion," he said.

Quintero said the city is working with developers and leasing agents to encourage grocery stores to consider locating at a proposed six-acre shopping center at Childs Avenue and Canal Street.

Reporter Mike North can be reached at (209) 385-2453 or mnorth@mercedsunstar.com.

This story was originally published April 27, 2012 at 3:08 PM with the headline "Save Mart closing two Merced stores."