MINNEAPOLIS -- Improving customer profitability in its wholesale operations and attaining critical mass in its retail operations are at the top of the list for Nash Finch Co. here, said Alfred N. Flaten, chairman and chief executive officer.
At the company's annual meeting here, Flaten said Nash Finch the wholesaler is furthering its goal of becoming "true partners" with its customers, while Nash Finch the retailer is striving for dominance in all its target markets.
The strategies are intended to counteract last year's disappointing earnings, which dropped 2.5% to $15.5 million from $15.9 million in 1993.
On the wholesale side, Flaten said, Nash Finch plans to expand products and services. "If our [retail] customers need it, we'll provide it. We can add value by providing a service," he said. This includes expanding current sales and marketing programs and developing new programs such as electronic price books and frequent buyer programs, he said.
Although Nash Finch has not traditionally taken chances with new technology and information systems, the company will now "be on the cutting edge," Flaten told shareholders.
The company is also looking to expand some areas of the business into vertical, or "complementary" markets, Flaten said. "In the future, we will not only handle our goods, we will also transport products for other businesses. We will evaluate the benefits of packaging or bottling some of the products we sell."
Nash Finch's retail operations are focused on achieving "critical mass" -- a key strategy considering the multitude of formats that have cropped up in the last few years, Flaten said.
Nash Finch will continue to offer multiple formats with differing merchandising mixes, services and sizes, but new store investments outside the company's existing markets must meet one of two criteria, according to Flaten:
"First, that the return significantly exceeds the opportunities in our present territory. Second, that the retailer is very large," he said. "In cases where we decide to enter a major new market, we will do it by acquisition only. We won't be putting up a single store into a new market -- unless it gives us a dominant position in that particular region."
He also said that in areas where critical mass cannot be achieved, the company will consider remodeling or selling those units.
And Nash Finch is not shying away from the global market. Although Flaten said he sees the "need to put our house in order domestically first," the company will participate in the global market selectively. He cited the company's stake in Hungarian retailer Alfa as an example of international involvement without a large monetary commitment.
Flaten opened the meeting with a tribute to the company's late leader, Harold B. Finch Jr., who died in a car accident in November.
