Evening star. [volume] (Washington, D.C.) 1854-1972, 1928-09-27
SANITARY GROCERY
! IN HUGE MERGER
Company to Combine Inter-
ests With Safeway Stores,
Incorporated.

Merger Of the Sanitary Grocery Co.
of Washington with the Safeway Stores,
Inc, of Baltimore, largest chain store
distributors of food products in the
West, which would bring together 1,76o
store units with combined sales for the
current year estimated at Sl25o0O'O00,
is being engineered under plan pro-
posed for submission to the stockholders
of the concerns.
Edward G. Yonker, president Of the
Sanitary Grocery Co., which operates
463 stores in Washington, Maryland and
Virginia, in confirming today's report
of the merger. announced that the terms
will be an offer of three shares OF Safe
way Stores common stock in exchange
for five shares Of Sanitary Grocery
common stock. It is expected that be-
fore this proposition can be consum-
mated Safeway common stock will be
increased by a five to one split, in which
event three new Safeway shares will be
offered for one share of stock.
Sanitary Preferred to Be Called.
AS a part of the new developments,
Sanitary preferred stock will be called.
but prior to redemption the preferred
stockholders will be entitled to convert
their stock into common and receive the
nro-rata shares of SafewGy common in
exchange. according to the plan. SAM
tary preferred stock, reputed to amount
to $3.50. 900. will be called at $1l0, it
is reported
The merger OF the two companies
will be one of the most important steps
taken in this direction in recent years.
THE Safeway Co. operates 993 grocery
stores, 289 markets and 6 bakeries and
is the largest chain west of the Mis-
sissippi River. The gross volume OF
Safeway business in 1927 was In excess
of $7800e,000. :
Mr.. Yonker will become president of
the corporation, which will operate the
Sanitary stores, and H. v. Hoskinson
VINO has been with the firm about 16
years, will become vice president. Mr.
Yonker will become vice president of
the Safeway Stores. Inc, with head
quarters in Washington. The position
Of M. B. Skaggs. the operating head of
the Safeway Stores. will remain UNI
changed under the merger.
Statement Issued.
In a statement issued today explain
ing the merger and the properties in
volved, Mr.. Yonker said:
THE Safeway Co. first came into
prominence in 1925 through the acquisi-
ton of several chains in California, and
in July, 1926, 1t joined with the Skaggs
organization. At the time these two
organizations joined forces they had
800 stores and total volume of business
of approximately S38,700,000. while the
sales in 1923 are expected to exceed
$100,000,000.
Sanitary Grocery Co., Inc, was orig
inally established in 1909 with %
stores. At the time of its incorporation,
in 1927, when the present management
took charge, it had 312 stores and a
sales volume of about S15,000,000. At
the end of the calendar year 1927 the
company had 1868 stores and did VOL
uen of business amounting to over
$17,700,000. In September, 1927, the
company acquired chain OF 80 Piggy
Wiggly self-service stores and meat
markets operated in Washington and
vicinity, and these stores are being Sue
cessfully operated under the Sanitary
management. Last May the company
acquired as stores of the H. D. Lipford
Grocery Co. located in Richmond, Va.
I estimate that the volume of business
of the Sanitary Grocery Co. this year
should be approximately $25,000,000.
IT believe that the Sanitary organi-
cation will be greatly benefited by an
alliance with one of the largest and
best operated grocery chains in this
country. have known Mr. M. B.
Skaggs. the operating head of the Safe
way system, for some years and believe
that the great growth of that chain is
largely due to his ability, coupled with
conservative financial sponsorship There
is a definite trend in this country to-
ward the consolidation of concerns
which distribute commodities direct to
the general public. Through these con-
solidations economies are effected and
considerable savings are passed along
to the public in the shape of superior
service and better quality of goods
at lower cost.
Two Officers Favor Plan.
81 shall be president of the corpora
ton which will operate the Sanitary
stores, while my associate Harry "
HoSklnSon, will be vice president Both
OF us are large stockholders in the
present Sanitary Co. and we will vote
IN favor OF the plan. Apart from this
shall become vice president of Safe
way Stores, Inc, with headquarters in
Washington. We plan to increase
stores in our immediate territory as
rapidly as good locations are available.
Il wish to emphasize that we will
continue to give our patrons in Wash
ington and other cities the same ex-
cellent service we have supplied in the
past together with the highest quality
of goods at the lowest prices consistent
with such quality. I believe that the
proposed alliance of these comnanies