Boise, Idaho-based grocery giant Albertson's has unveiled major investment plans in Southern California, the largest retail market in the US, committing over US$1bn in capital investment during the next three years for new stores and remodels.

Chairman and CEO Larry Johnston commented: "Southern California is a strategic market of choice that our company is committed to grow and strengthen."

Peter Lynch, president and COO, commented on the new marketing strategy that will be propelled by the US$1bn investment: "We will implement plans for a Dual Branding strategy, with a unique Albertson's/Sav-On combination format across the region."

Albertson's owns two major drugstore brands, Sav-On Drug and Osco Drug, and said it first started the combination food and drugstore concept with its Jewel-Osco format in the Chicagoland area. Following a decision last year to extend this combination format, the company began two pilots outside Chicago in Tucson and Reno, marrying the Albertson's food brand with both the Sav-On drug brand in Reno and the Osco drug brand in Tucson. After a successful pilot, a rollout then began into Phoenix and Omaha.

Southern California is expected to be the largest and most powerful application of the combination format.

The Albertson's food banner currently ranks as the first or second retail food brand in each of the five major geographic market sectors that make up Southern California. The company owns and operates 268 Albertson's Food Stores and 304 Sav-On Drugstores in the region.