Associated Food Stores, a Salt Lake City-based grocery cooperative that acquired 34 Albertsons stores in Utah in July from Minneapolis-based Supervalu Inc., is converting the stores to a new banner, Fresh Market.

According to an Oct. 23 letter sent to vendors including the Daily Herald, Associated Food said it expects to close the transaction on Nov. 2.

Under the deal, five stores in Utah County will be converted to the Fresh Market banner. The stores are at 760 E. Main Street in Lehi, 135 E. Main Street in American Fork, 652 N. 800 East in Spanish Fork, and two in Provo at 560 W. Center Street and 2255 N. University Parkway.

The Fresh Market stores will operate as corporate stores in a new division, Associated Fresh Markets.

Associated Food officials on Wednesday declined to comment on the Fresh Market banner ahead of a planned announcement on Monday, and how it will differ from the company’s existing banners including Macey’s, Dan’s, Lin’s and Dick’s.

After the acquisition is finalized, Associated Food will have a total of 56 company-owned stores, up from an existing 22 stores. Its grocery cooperative membership will climb to 538 from the current 504, and its total employee base in Utah will jump to 7,700 from 5,000.

Under the deal, 2,700 employees of Albertsons will be retained by Associated Food, and the 34 stores will be managed by Senior Vice President Dick King, who had served with Albertsons for 36 years and was former president of the company prior to joining Associated Food in 2003.

The deal does not include two Albertsons stores in Orem, and two in West Jordan.

Bret Gallacher, Associated’s spokesman, said the acquisition will enable the grocery cooperative to “buy more efficiently and help reduce its overhead costs.”

He said the new stores, which average about 47,000 square feet, will focus on value pricing and providing more fresh products.

The deal also means Albertsons’ retail presence in the Beehive State will shrink dramatically after nearly 60 years of operating here. After the sale, Supervalu will have three Albertsons stores left in the St. George area, and a Salt Lake City distribution center that will continue to serve Albertsons stores in Idaho, Wyoming and Montana. Nationwide, Supervalu will have 460 Albertsons stores left.

Founded in 1939, Albertsons was acquired in 2006 by an investor group led by Supervalu for $9.7 billion in cash and stock.

Supervalu’s earnings for the second quarter ended Sept. 12 were down 42 percent from a year ago to $74 million, or 35 cents per share. Sales for the quarter totaled $9.5 billion, down 6.9 percent from last year. Same-store sales fell 4.8 percent in the quarter, the company said in its second-quarter earnings report released last week.

Analysts say rising unemployment and the ongoing recession have forced more consumers to economize, squeezing profits for grocery retailers.

To stem declining sales, Supervalu CEO Craig Herkert announced a massive expansion of the company’s Save-A-Lot banner, a discount supermarket with 1,200 locations across the country. He said Supervalu will double the number of locations within five years.