WAYNE, N.J. -- Grand Union Co. here said last week it will spend $115 million on capital development in fiscal 2000 on 53 separate projects -- its biggest budget in 10 years.
al projects for the fiscal year, which began April 4, will include 10 new or replacement stores -- which will add approximately 410,000 square feet, or 7%, to the company's store base; three store expansions; 14 major remodels; 18 minor remodels; and eight store conversions, plus technology installations.
J. Wayne Harris, chairman and chief executive officer, also said last week that Grand Union expects to report improved results May 19 for the fiscal year and fourth quarter ended April 3.
"Although the marketplace continues to be fiercely competitive, we expect to report positive comparable-store sales for the fourth quarter, and we expect to achieve a very strong operating cash flow performance compared to the prior year," he said. "These improved results will also include continued progress in our expense-control efforts."
According to Harris, the dual strategies of improving its existing store base and adding incremental square footage "are designed to boost our total sales and operating cash flow through the use of attractive shopping environments, targeted product selection and competitive pricing."
Grand Union said its capital plans this year include the following:
Ground-up construction of three new supermarkets, in the 55,000- to 60,000-square-foot range, in New Jersey, including a prototype store in Carlstadt that is scheduled to open before the end of calendar 1999.
Ground-up construction of two super discount stores in New York state -- a new format whose name the company is not disclosing.
Introduction of an upscale Fresh Market format at four stores in Connecticut and on Long island.
Construction of five replacement stores in New Jersey and Vermont, including a store in Point Pleasant, N.J., that opened in early March.
Expansion of three existing locations in Vermont and New Jersey.
Conversion of four stores to Hot Dot Foods, a limited-assortment format that was introduced in February with two stores in Vermont. Two of those stores opened last week in Plattsburgh, N.Y., and St. Albans, Vt., and two more are scheduled to open this week in Norwich, N.Y., and Windsor, Vt.
Major remodelings at 14 stores and minor remodelings at 18 stores.
Expansion of a time-and-attendance system chainwide; expansion of a direct-store delivery system chainwide to encompass perishables along with dry grocery; and installation of labor scheduling chainwide.
Meredith Adler, a securities analyst with Lehman Bros., New York, said she is very upbeat about Grand Union's spending plan.
"One criticism of Grand Union in the past has been that it didn't spend its money wisely, but with this plan it is spending the money wisely," she told SN.