WASHINGTON -- Supermarket cooperatives figure prominently in an annual Top 100 list released by the National Cooperative Bank here.
The rankings are based on 1997 revenues.
Leading the way among industry representatives is Elizabeth, N.J.-based Wakefern Food Corp., which -- for the second consecutive year -- was third among cooperatives from all sectors. The rankings are based on annual revenues; Wakefern recorded revenues of $4.6 billion last year.
In all, 21 supermarket co-ops made the list and, of those, 13 showed revenue growth over the previous year.
This is the sixth year the bank, established by Congress in 1978, has compiled the Top 100 list. The bank, itself a co-op, became privatized in 1981. Since then, it has provided approximately $500 million in financing, bank officials said.
In addition to Wakefern, Topco Associates, Skokie, Ill., and Associated Wholesale Grocers, Kansas City, Kan., cracked the Top 10 at seventh and eighth, respectively. Though those two co-ops slipped from fifth and seventh as compared with the previous year, the NCB rankings showed most companies moved up a few spots over 1996 and previous years.
For instance, Associated Grocers of Seattle went from 35th in 1995 to 30th last year with nearly $1.1 billion in sales, an increase of 3.5%. Also, Associated Food Stores of Salt Lake City climbed from 41st in 1995 with $842 million in revenues to 37th last year -- and 10th overall among supermarket co-ops -- with $934 million in revenues, an increase of nearly 11%.
Laura McAfferty, a spokeswoman for Wakefern, which serves 190 stores in the Northeast, including 20 company-owned ShopRite supermarkets, said the company "is always looking" to expand its customer base while growing its self-distributing retail operation. McAfferty wouldn't specify how much new wholesale business has been added in the last year, but she did say 12 new ShopRite stores were opened.
According to McAfferty, the flurry of mergers and acquisitions in the public supermarket sector has benefited co-ops. "All these consolidations go in the opposite direction of what we're doing. Instead of what you get with those big companies, our customers like that personal touch," she said.
The merger activity has also forced co-ops to go on the offensive and come up with ways to minimize costs and broaden the revenue pot members share in. At Affiliated Foods Cooperative in Norfolk, Neb., Virgil Froelich, president and chief executive officer, said "anything we can do to save labor and make things more convenient for stores, we do. That's how we compete against the [larger wholesalers]."
According to Froelich, whose co-op ranked 15th among supermarket co-ops on the Top 100 list and 67th overall with $544 million in 1997 revenues, technology investments have paid off in terms of reduced labor costs and better efficiency. "We use the Internet and satellite communication that lets us contact all our stores in less than a minute. We use batch-picking and cross docking and we try and give more services to the stores, like a packing slip in each tote so if you get called away [while unpacking] it's easy to check the totes and not lose your place."
The bank is also working with the National Grocers Association, Reston, Va., to help streamline financing for independent supermarket operators. A new program has been rolled out that allows NGA members seeking loans of $1 million or less -- typical of most loan requests, according to bank officials -- to apply for one-stop financing. Previously, operators would have to contend with a more arduous application process.
"We set up a new unit that's a priority banking center to target those loans that are pretty straightforward," said Rebecca Coder, a spokeswoman for the bank. "It's cookie-cutter, quicker financing for the retailers."
