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RICHFOOD AND FARM FRESH ANNOUNCE RESALE OF CERTAIN SAFEWAY STORES AND EXTENSION OF SUPPLY AGREEMENT

 RICHMOND, Va., Dec. 13 /PRNewswire/ -- Richfood Holdings, Inc. (NASDAQ-NMS: RCHF), and Farm Fresh, Inc., today announced that Farm Fresh has completed the resale of three former Safeway retail grocery stores to independent owner-operators. The three stores, which will be supplied by Richfood, were acquired by the independent owner-operators in transactions financed by Richfood. The stores were among 15 Richmond area Safeway stores acquired by Farm Fresh yesterday. After the sale of the three stores and the permanent closing of three other former Safeway stores, Farm Fresh will operate the nine remaining former Safeway stores under its "The Grocery Store" format.
 In addition, Richfood and Farm Fresh announced the extension of their long-term supply relationship. The existing supply agreement, which secures Richfood's position as principal supplier to Farm Fresh and its affiliated companies, has been extended by more than 2 1/2 years and now expires in December 2001. Minimum purchase requirements under the supply agreement were also adjusted to reflect new volume anticipated as a result of the acquisition of the former Safeway stores. The amended supply agreement continues to include minimum purchase requirements both by dollar amount and by category of goods and is subject to further adjustment, as Farm Fresh acquires or disposes of stores.
 The 12 former Safeway stores to be operated by Farm Fresh and the independent owner-operators had aggregate retail sales of approximately $120 million in 1992.
 Donald D. Bennett, president of Richfood, said: "We are pleased to reaffirm the strong relationship that exists between Richfood and Farm Fresh. The extension of our supply agreement reflects a long-term commitment covering a significant portion of our sales volume, that will grow as Farm Fresh continues to grow. We are also excited about the new sales volume associated with the 12 former Safeway stores that will now be supplied by Richfood. Our continued relationship with Farm Fresh, together with this new sales volume, will allow Richfood to maximize buying and operating efficiencies, which in turn benefits all of our customers."
 Michael E. Julian, chief executive officer of Farm Fresh, said: "Farm Fresh is enthusiastic about the extension of our supply agreement, which strengthens our relationship with Richfood. It reflects our confidence in Richfood as a supplier, and will permit Farm Fresh to continue to concentrate its efforts on growth at the retail level."
 Richfood Holdings, Inc., is the largest wholesale food distributor in its mid-Atlantic operating region and the 11th largest in the United States. The company sells a complete selection of national brand and private label groceries, frozen foods, meat, produce, dairy, bakery and delicatessen products to approximately 450 customers that operate approximately 750 retail supermarkets in Virginia, Maryland, North Carolina, Delaware, West Virginia and the District of Columbia.
 -0- 12/13/93
 /CONTACT: John E. Stokely, executive vice president-finance and administration of Richfood Holdings, 804-746-6381, or Michael E. Julian, chairman and chief executive officer of Farm Fresh, 804-480-6801/
 (RCHF SWY)


CO: Richfood Holdings, Inc.; Farm Fresh, Inc.; Safeway ST: Virginia IN: REA FOD SU: TNM

DC-DT -- DC024 -- 3284 12/13/93 15:49 EST
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Publication:PR Newswire
Date:Dec 13, 1993
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