Skip navigation

ALBERTSON'S PLANS FOR 1,000 UNITS BY 2000

BOISE, Idaho -- Albertson's here has charted an aggressive five-year plan that calls for investments totaling $3.4 billion through 1999 -- an increase of nearly 31% over the $2.6 billion projected by the company a year ago.The new five-year plan increases spending in virtually all categories, with particular emphasis on unit expansion. Albertson's hopes to have 1,000 stores open by the year 2000,

BOISE, Idaho -- Albertson's here has charted an aggressive five-year plan that calls for investments totaling $3.4 billion through 1999 -- an increase of nearly 31% over the $2.6 billion projected by the company a year ago.

The new five-year plan increases spending in virtually all categories, with particular emphasis on unit expansion. Albertson's hopes to have 1,000 stores open by the year 2000, John Carley, president and chief operating officer, told shareholders at the company's annual meeting here.

The company currently operates 721 stores in 19 states.

The stepped-up growth strategy is a response to Albertson's 25th consecutive year of increased sales and earnings. As reported, net earnings in 1994 rose 17.9% to a record $400.4 million on sales of $11.9 billion, a 5.4% increase.

This year, the company has already picked up where it left off in 1994. For the first quarter ended May 4, net earnings rose 45.7% to $99.3 million, on sales of $3.1 billion -- a 6% increase. Meanwhile, same store sales were up 0.5%.

Albertson's expects to open 351 new stores by 1999 as part of the revised five-year plan -- an 18.6% increase over the 295 new stores projected through 1998 a year ago.

During that same span, the chain would most likely close about 12 stores per year, or 60 in all -- but the company would still reach its target of 1,000 stores before the year 2000, said Dave Connolly, vice president and treasurer, after the meeting.

To fund its rapid expansion,

Carley said Albertson's intends to spend $2.5 billion over the next five years, nearly 32% more than the $1.9 billion projected in last year's five-year plan.

Connolly told SN the increase resulted from a decision by Albertson's to accelerate the rate of square footage growth to 8% a year over the next four years, compared with a 7% annual growth rate projected through 1998 a year ago.

According to Connolly, the number of stores planned for this year will remain at 55; however, the chain's plans now call for 66 stores in 1996 (six more than projected a year ago); 72 in 1997 (seven more than last year's projection); 78 in 1998 (13 more); and 80 in 1999.

Connolly told SN the chain will continue its march into Texas with its first 15 stores in the Houston market over the next two years. Eight will open this fiscal year, including three in October, two in November and three in January 1996, he said.

Rather than supply those stores from the chain's current Fort Worth, Texas, distribution center, Connolly said Albertson's will build a $30 million, 700,000-square-foot distribution facility in Houston in the fall of 1996. Among other highlights of the new five-year plan:

Albertson's will allocate $460 million for store remodels through 1999 -- an increase of 12.5% over the $409 million projected last year through 1998. The plan calls for 240 remodels, including 20 expansions, over five years, compared with 228 remodels and 30 expansions projected a year ago through 1998. Connolly said he was uncertain how those remodels would be divided among the five years.

The chain will spend $210 million between now and 1999 to enhance distribution systems -- a jump of 19.3% over the $176-million expenditure projected last year through 1998. Connolly attributed the increase to the chain's decision to build the Houston facility.

Albertson's will spend $120 million to replace and upgrade existing equipment over the five years of the plan, compared with $55 million projected a year ago through 1998.

Albertson's will allocate $80 million to new information systems and technology through 1999, compared with $96 million projected last year through 1998.

Carley told shareholders that Albertson's expects to continue to fund the five-year plan primarily from internally generated funds and leases where it is unable to own store sites. He also said that substantially all existing long-term debt will be paid off by early 2000.

1st-Quarter Results

Qtr Ended 5/4/95 5/5/94

Sales $3.1 bil $2.9 mil

Change +6%

Same Store +0.5%

Net Income $99.3 mil $68.2 mil

Change +45.7%

Inc/Share 39 cents 34 cents