MINNEAPOLIS (FNS) -- Fleming Cos., Oklahoma City, will make a stronger and more focused push on retailing than ever before.
That was the message from Mark S. Hansen, chairman and chief executive officer, presiding over his first annual meeting since taking the helm last November. It was also the firm's first shareholder meeting to be held away from Oklahoma City. Hansen is trying to reverse the company's declining sales and earnings.
Growing sales in both retail and wholesale operations is a top priority, Hansen told about 100 shareholders, many of them employees of Rainbow Foods, Fleming's share-of-market leader in this area. "In our retail operations, growth plans call for concentrating on chains with a high market share and good future growth potential," holders were told. "We're concentrating in accelerating capital investments in these market share leaders: Baker's, Rainbow Foods and Sentry Supermarkets.
"We also plan to grow those retail chains that offer a unique selling platform," Hansen said. "Food 4 Less offers excellent potential as one of our most successful price-impact formats."
After the meeting, it was disclosed that Fleming is purchasing eight Food 4 Less units in northern California from Rebco Foods Inc., an independent operator. As a result of the deal, Fleming would operate 24 Food 4 Less units.
Expansion plans this year in Fleming's retail operations represent a 10% increase in total upgraded square footage over last year, shareholders were told. Plans call for repeating this rate of growth in 2000 and beyond. "We also plan to expand the mix of higher margin
perishables and nonfood products to improve earnings," Hansen noted.
"We are in the process of rationalizing our assets in our retail operations to focus on chains with high relative market-share positions," Hansen said. "Those chains who do not meet our standards are being sold or closed. The Hyde Park Market and Consumers Food & Drug chains are largely divested."
Hansen said after the meeting that while the company's wholesaling operations are doing well, growth plans call for expanding beyond traditional wholesale customers into more alternative formats, like convenience stores and drug stores. He also expects efficiencies in wholesaling to result from central rather than divisional procurement. "The vast majority of general merchandise, meat and produce products are now being procured centrally," he said. Some dry groceries also are being procured centrally on the West Coast.
Ninety-eight percent of eligible stockholders approved annual rather than staggered election of directors.