PORTLAND, Ore. -- With spending on management information systems and new distribution facilities behind it, Fred Meyer Inc. here expects to reduce capital spending by about one-third during the two-year period that began in 1996, according to the company's annual report.
nouncement of the pending merger earlier this month of Fred Meyer and Smith's Food & Drug Centers, Salt Lake City.
Writing in the report, Robert G. Miller, chairman and chief executive officer, said the company is "head[ing] into the home stretch" this year in its efforts to update its MIS capabilities -- a process that began in 1991.
As a result of that effort, he said, Fred Meyer will be able to discontinue use of its old mainframe computer system this year at an annual savings of about $2 million in operating costs.
Miller also said the company expects to complete installation of a new food merchandising system and major components of a similar nonfood system this year, including installation of a new direct-store-delivery system, that will allow the company to combine all computer operations into one system from the two it operates on the mainframe.
"When combined with the company's improved distribution capabilities and new financial systems, the merchandising and buying systems will enhance the company's quick-response inventory capabilities and will improve future inventory management and profitability," Miller said.
"The company believes that these systems will be able to support its growth into the next century," he added.
According to the report, Fred Meyer introduced its own bagel line last year and added pet centers at 13 stores, with 17 more scheduled for this year.
The report said food accounted for 41.1% of sales at the company's multidepartment store units, compared with 41% in 1995, 38.3% in 1994 and 37.5% in 1993. Food sales rose 4.7% last year, while private-label sales rose to 20% from 12% in 1991, the report noted.
Sales in nonfood categories rose 32.1% during the year, with the company noting its hopes to boost its private-label mix in nonfood to more than 20%, compared with 16% to 18% currently.