AppleTree Markets

AppleTree Markets was a supermarket chain in Texas formed in 1969 when Safeway opened its first stores in Houston, which were spun off under the AppleTree name in 1988. The division once had 100 stores in Greater Houston and Greater Austin. By January 21, 2002, AppleTree had reduced its holdings to two stores in Bryan, Texas where it had shifted its headquarters. One of the remaining locations was sold in 2009 and the final location, in Bryan at Highway 21 and Texas Avenue, closed in early 2012 marking the end of the chain.

Safeway put its 18-year-old Houston division up for sale in 1988 in an effort to raise money to pay off debts from a $4 billion leveraged buyout in 1986. On June 14, 1988, Safeway agreed to sell its Houston division to Texas Supermarkets Inc., a holding company formed by local investors Duncan Cook & Co. and the Sterling Group. The deal included 50 stores in Houston, 20 in Austin, stores in 23 other communities in East and Central Texas, along with a distribution center, frozen food warehouse, bread manufacturing plant and milk processing plant. At the time of the $174 million transaction, Safeway's 18 percent market share ranked third in the Houston market behind Kroger, with 27 percent, and Randall's Food Markets, with 21 percent. M. Dean Gantt, the former Houston division manager, assumed the position of president and chief executive officer of Texas Supermarkets Inc., which initially owned only eight of the stores from the transaction and leased the rest from Safeway. Texas Supermarkets was allowed to operate under the Safeway banner until June 28, 1989, but it would continue to do so until a new name began appearing in July 1989—AppleTree Markets. Five stores were renamed Budget Stores, stores with slightly lower prices on some items and fewer specialty shops such as delis, bakeries, and floral shops. The last of the Safeway banners was replaced in September 1989.

Gantt retired abruptly in October 1989 and was replaced a month later by Arthur L. Patch, senior vice president of Dublin, California-based Lucky Stores Inc.

The company struggled with the debt that originated from the 1988 leveraged buyout out Safeway's stores. After failed attempts to restructure that debt, AppleTree sought Chapter 11 bankruptcy protection in 1992. Soon after the filing, AppleTree announced its plans to begin closing stores. Arthur Patch resigned his post in March 1992, and the chairman of the company's board, Fred R. Lummis, took the helm. Also a growing problem was the chain's aging store base. The bulk of Safeway units in Houston dated from the late 1960s and early 1970s, and a logo change in 1981-1982 was the only alteration, if any, to most of such stores before the AppleTree split. Many former Weingarten's stores, which had been acquired by Safeway in 1983, were even older. A very small minority of Houston Safeways were built in 1986, but these were larger and had a more modern, conventional prototype. This was in contrast to the reinvention of Super Fresh beginning in the early 1990s, a chain which itself was spun off from A&P's Philadelphia division in 1982. Also in Philadelphia, many A&P as well as Acme and Food Fair (doing business as Pantry Pride in its later years, and not related to the current Houston chain of the same name), and Penn Fruit (acquired by Food Fair during the same period) stores closed and reopened as IGA and related chains Thriftway, Shop 'n Bag, O&O, Pick Well, Great Valu (SuperValu), and ShopRite. Philadelphia retail icon Thrift Drug was also absorbed into Eckerd in 1997, but many of its stores were relocated or closed soon after.

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