With its announcement last week of plans to build 70 supermarket branches in Arizona, Wells Fargo & Co. continues to expand one of the most aggressive in-store branching programs in the industry.

San Francisco-based Wells said last Friday that it would install the in- store branches in supermarkets belonging to the Bashas' chain, which operates 73 stores around the state.

The new Bashas' branche are scheduled to be open by next year's first quarter. In addition, Wells inherited 18 in-store branches in Smith's supermarkets from First Interstate Bancorp, which it acquired on April 1.

The 70 Bashas' locations and the 18 former First Interstate branches will make Wells the No. 1 supermarket bank in Arizona.

Currently, Columbus, Ohio-based Banc One Corp. is Arizona's top supermarket bank, with 43 locations in Fry's supermarkets.

BankAmerica Corp. of San Francisco is second, with 28 Arizona locations in stores belonging to the Smitty's chain.

Numbers, however, don't tell the whole story. Compared with the other chains, Bashas' stores tend to be smaller, with less customer traffic, which leaves Banc One in a strong position in the larger, urban markets of Phoenix and Tucson.

Bashas, though, does take Wells into 13 new markets around the state.

"Bashas is a long-time, locally owned grocer, and they serve a lot of smaller communities where we didn't have a banking presence already," said Wells' senior vice president Barbara Ralston, manager of the bank's in- store branching division outside California.

The move in Arizona will mark the first expansion of Wells' in-store banking program outside California since Wells acquired First Interstate.

In the wake of that acquisition, Wells announced plans to shutter about 350 freestanding First Interstate branches, but keep all the supermarket offices belonging to both banks, about 518 in all.

While many banks around the country have opened grocery store branches few have been so aggressive as Wells in slimming down the traditional branch network at the same time.

"The entire bank's strategy is built on multiple channels of distribution," Ms. Ralston said. "Traditional branches play a role, the ATM system plays a role, also on-line banking, and of course in-store supermarket banking. All those things, we believe, add convenience for our customers to access the bank and gives us the opportunity to access a much larger customer base."

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