Randall’s Initiates Search

Fogarty Klein Will Get Chance to Retain Food Stores
DALLAS–Houston-based Randall’s Food Markets is holding talks with Texas agencies about the estimated $10 million broadcast advertising account for its Randalls and Tom Thumb grocery chains now handled by Fogarty Klein & Partners.
Sources said Houston’s Fogarty will be given a chance to defend. “We certainly value our relationship with Randalls and Tom Thumb,” agency principal Rich Klein said. “We understand the pressures they face every day in their business, and we will be discussing how we can continue to help them succeed in such a competitive industry.”
Randall’s has contacted several shops and has scheduled initial capabilities meetings with some, sources said. Tom Witby, Randall’s vice president of advertising, declined to comment on the agency search.
Fogarty’s work consists mainly of television and radio ads, with print created in-house. The agency has handled advertising for the Randalls units for more than 10 years and added Tom Thumb in 1993 after those stores were acquired. Today there are 62 Randalls stores in Houston and Austin, Texas, and 54 Tom Thumb units in Dallas/Fort Worth.
In April 1997, New York investment firm Kohlberg Kravis Roberts & Co. acquired a 62 percent stake in Randall’s and has committed significant capital to store renovation, according to John Fusek, fixed income analyst with Goldman Sachs in New York.
Fusek said Randall’s has posted impressive gains since the KKR deal, including a 9.9 percent hike in same-store sales for its latest quarter, versus the same 1997 period.
While the stores are performing well against rivals like Kroger and Albertson’s, sources said Fogarty has witnessed an influx of new marketing officials since the KKR deal. Among Randall’s new personnel is Frank Lazaran, senior vice president of sales and merchandising, who came from Ralphs Grocery Co., Compton, Calif.
It was not clear last week if the the client had established a timetable for a decision.