TUCSON, Ariz. -- Grocery retailer-owned wholesalers outperformed the food industry and inflation in 1995, according to a report released at the National Grocers Association Executive Conference here.
ide growth in that period. The 30 co-ops operated a total asset base of $4.23 billion last year, a 4.6% rise from 1994.
The sample surpassed voluntary wholesalers in operating efficiency, the report said. The group generated $5.90 in sales out of every $1 investment in assets in 1995 vs. a $4.21 ratio by other wholesalers. The 30 companies' total purchases topped $22.7 billion and outpaced inflation, and their inventory stabilized at 21.6 days on hand vs. 25.5 days at voluntary wholesalers.
Also, a survey in the NCB study found the following: · Grocery co-ops still are dominated by single-store operators and mostly serve stores of less than 20,000 square feet.
Many cooperatives have turned to nonmember business to spur volume.
Investment in technology and information systems has become more important. The 30-company sample spent more than $19 million on systems in 1995.
The study's findings show that independents continue to be a strong force in the industry, according to Tom Zaucha, president of Reston, Va.-based NGA.
"The American consumer benefits significantly from the most diversified and competitive food distribution system in the world, and retailer-owned companies remain significant players in that equation," he explained. "The results also reinforce the proposition that independent-owned operators, working in cooperation with their distribution centers, continue to be skilled, aggressive competitors in an industry that is experiencing changes of revolutionary proportion."
According to Judith E. Sandberg, managing director of NCB's Distribution Team, "The results demonstrate that cooperative wholesalers in the food industry are holding their own against all forms of competition. While the big are getting bigger, there are a number of cooperative wholesaler success stories at every revenue level." NCB gathers and analyzes data about grocery and other national co-ops.
This is the fifth year NCB has conducted the study, which reflects data from the 30 co-ops and comparable financial statements. Companies were separated into three groups based on 1995 revenues: more than $700 million, $250 million to $699 million and $50 million to $249 million.
Participants, all in the first group, included Wakefern Food Corp., Elizabeth, N.J.; Twin County Grocers, Edison, N.J.; Associated Wholesale Grocers, Kansas City, Kan.; Certified Grocers of California, Los Angeles; Spartan Stores, Grand Rapids, Mich.; Roundy's, Pewaukee, Wis.; Certified Grocers Midwest, Hodgkins, Ill.; Associated Grocers, Seattle; Associated Food Stores, Salt Lake City, and United Grocers, Portland, Ore.