Following are excerpts from an exclusive interview with Mark Hansen, Fleming's chairman and chief executive officer. He spoke to SN last week shortly after he explained to industry analysts Fleming's reasons for selling its 110 price-impact stores.
ansen: If you jump geographies to Europe, it's very obvious to us the trend that's happening to fuel. The problem we have is with such a high concentration in convenience-retailing supply, that puts us at loggerheads with that market. Supermarketers for years have layered on new categories of merchandise. As they lost center-store market share, they've gained pharmacy and fuel as alternative strategies. SN: You said Fleming will become a pure-play wholesaler. Does that mean you're going to sell the Yes!Less stores as well?
Hansen: We are keeping those stores and are intending to roll Yes!Less out as a franchise model beginning next year. Our Yes!Less stores continue to have very robust, year-over-year, same-store sales growth. We're very pleased about that. We are continuing to fine-tune the format, but there is a significant level of interest from retailers. We may run a small number of stores, like McDonald's owns a small number of restaurants, but the essential process was to develop a franchisable format.
SN: You confirmed that the company has eliminated 350 headquarters positions since July. How has this affected the morale of the people still working there?
Hansen: I think there's a high level of dedication and determination in the group we have. Certainly for the people affected it wasn't pleasant, but I would describe our morale as dedicated and determined.
SN: Do you think the decision to sell the price-impact stores will help the performance of Fleming's stock?
Hansen: Clearly, we're not satisfied with the financial performance of our retail business, and your stock performs relative to what your earning streams are. This decision will add clarity as well as improve earnings. I think the financial community will respond positively.