MINNEAPOLIS -- Nash Finch Co. here said it will launch a new Hispanic banner -- Avanzando -- early next year in Denver.
Ron Marshall, chairman, president and chief executive officer, said "Avanzando" means to progress or to advance, "and that is just what our new format represents -- a truly new, progressive shopping experience."
Nash Finch has been operating a Hispanic format, called Wholesale Food Outlet, at three locations for the past couple of years. The company said those stores will be converted to the new banner.
Marshall said Nash Finch expects Avanzando stores to run from 18,000 to 40,000 square feet, with weekly sales of about $200,000.
The company anticipates opening a minimum of 10 Avanzando units a year, Marshall said, though growth could exceed that. He said he sees opportunities to open 12 to 16 stores in Colorado and 25 to 30 units or more in the Chicago-Milwaukee markets, then to open additional locations in cities in between with Hispanic populations of 10,000 to 25,000, including Omaha, Neb.; Sioux Falls, S.D.; Fargo, N.D.; and St. Paul, Minn.
Marshall also said Nash Finch plans to expand its limited assortment store format, Buy 'n Save, across the Upper Midwest at a rate of at least 10 stores per year, with stores falling in the 10,000- to 15,000-square-foot range, with a weekly volume of $55,000. Nash Finch operates four Buy 'n Save units in Minnesota.
He said the company will continue to seek retail acquisitions in the Upper Midwest, "and over the next two to three years, we see opportunities to double the size of our retail business."
Marshall made his remarks during a conference call following the release of financial results for the third quarter and 40 weeks ended Oct. 6.
Sales for the 16-week quarter rose 5.8% to $1.3 billion and net income jumped 50.7% to $6.1 million. For the year to date, sales increased 4.7% to $3.1 billion and net income climbed 37.3% to $14.6 million.
Sales in Nash Finch's food distribution segment rose 13% to $655.9 million (51% of total revenues) and operating profit was up 56% to $18.6 million.
In the company's retail segment (representing 25% of revenues), sales declined 2% to $314.9 million, and comparable-store sales dropped 2.3%, while operating profit rose 23% to $12.7 million.
Marshall said same-store sales fell after the company reduced promotional activity in certain markets during the summer to achieve margin increases. However, the company has "turned up the heat a little" since the start of the fourth quarter, he noted, "and we expect that to continue through next year as overall levels of competition go up across the board."
He said he expects same-store sales to improve -- to be flat or a little bit positive -- during the fourth quarter, "but the market is very competitive with very low price points, and being very conservative -- or very realistic -- we expect flat comps in 2002."
Nash Finch said sales in its military segment (representing 24% of revenues) were up 1% to $304.1 million and operating profit rose 3% to $7.2 million. Marshall said the company's military sales were not significantly impacted following Sept. 11 since most of its sales base consists of military retirees and civilian contract workers, "who are unaffected by any change in military troop deployment or movement."
During the conference call, Marshall also talked about Nash Net, a system that provides independent customers with Internet-based technology the opportunity to access the company's merchandising programs. He said the first phase of the system, which was launched in September, enables retailers to reduce the new-item cycle time from 24 days to three days and increase awareness and response to Nash Finch promotions.
The second stage will link participants to vendors, and the third stage will integrate the program with the company's legacy systems, Marshall said.
"Other companies have other programs, but none runs with the simplicity and elegance this one has," he added.
