SMITH'S CLOSES DOWN RESTAURANT OPERATIONS IN 20 UNITS

SALT LAKE CITY -- Smith's Food and Drug Centers here has shuttered its restaurant operations in 20 Smitty's Super Valu supermarkets in the Phoenix area.Many of the restaurants, also called Smitty's, had operated since the supermarkets were opened in the early 1960s. Smith's Food and Drug Center and Smitty's Super Valu were merged in the first half of 1996.A source in Phoenix said Smith's has announced

SALT LAKE CITY -- Smith's Food and Drug Centers here has shuttered its restaurant operations in 20 Smitty's Super Valu supermarkets in the Phoenix area.

Many of the restaurants, also called Smitty's, had operated since the supermarkets were opened in the early 1960s. Smith's Food and Drug Center and Smitty's Super Valu were merged in the first half of 1996.

A source in Phoenix said Smith's has announced plans to replace some of the former Smitty's restaurants with a new format for a home, apparel, electronics and garden center, to be called Smitty's Marketplace. The Marketplace format has been tested in two other Phoenix area stores where Smith's had already closed its restaurants.

Smith's officials did not return calls seeking comment on the decision to close the remaining restaurants.

The manner of the restaurants' closure disturbed some Phoenix residents, said the local source, who said Smith's officials called their restaurant employees at home to tell them the facilities had been closed, effective immediately, and that the employees were thus out of work. Employees received a minimum of two weeks pay or $200, whichever was higher, as severance pay, said the source.

Two food courts in Smitty's supermarkets, where Taco Bell and Subway units operate, were also closed. One food court was reportedly spared.

Smith's runs 23 Smitty's stores in Arizona, primarily in the Phoenix area. Smitty's stores in the Tucson market were converted to the Smith's banner after the merger. Smith's was recently acquired by Fred Meyer Inc., Portland, Ore.