Homeland: Opportunities at Home
Homeland Stores, Oklahoma City, sees "tremendous opportunities" to be a consolidator in its home state, where 49% of retailers operate 10 stores or less, said David B. Clark, chairman and chief executive officer.
A week after making his presentation to the Food & Drug Retailing Conference sponsored by Donaldson Lufkin & Jenrette, New York, Homeland disclosed plans to purchase nine stores in eastern Oklahoma from an independent operator. (See story, Page xxx.) ....
"We want to take advantage of the situation whenever an independent leaves the market," Clark said, "and we will seek and make acquisitions within Oklahoma that are accretive to earnings."
Homeland, which operates 69 stores, emerged from a voluntary reorganization in mid-1996. Clark joined the company in early 1998.
Homeland's goal, Clark said, is to try to attract a younger consumer. "The company has always done a good job going after an older, less affluent customer with a smaller family, and while we are continuing to serve that customer, we want to target aging baby boomers with families and moderate-to-high incomes who are looking for convenience, freshness and value.
"We want to distance ourselves from peripheral customers who are driven by price -- younger shoppers with small families who are income-constrained and who tend to gravitate to a Wal-Mart supercenter. That still leaves us with a sizable market."
Clark said Homeland is committed to competitive shelf prices "because we want to change the perception that we are higher-priced. And we've issued our Homeland Savings Card to over one million people in 350,000 households, about one-third of the state's population, which allows us to do 'relationship marketing' that focuses on our customers' needs, to do tie-ins with other local businesses and to target lost customers when a Wal-Mart supercenter enters the market."
Clark said 50% of Homeland's stores have been upgraded in the last three years, "and we think we have all the right ingredients in place to move forward successfully."
He said the company plans to spend between $10 million and $11 million on capital expenditures this year for eight major remodels, year-2000 compliance and maintenance capital.
In response to a question, Clark said Homeland accounts for a 15% market share in Oklahoma City, behind Boise, Idaho-based Albertson's; 12% to 13% in Tulsa, Okla., again behind Albertson's; and 20% in Amarillo, Texas, behind United Supermarkets, Lubbock, Texas.