SALT LAKE CITY -- American Stores Co. here said total sales increased 2.6% to $4.87 billion for the 13-week first quarter ended May 2. Comparable store sales increased 0.9% over the prior year first quarter. Comparable store sales in the company's pharmacies increased 13.6% for the first quarter 1998.
The company opened or acquired 13 new stores, completed six remodels and closed 12 stores during the quarter. Compared to the end of the prior year first quarter, retail square footage increased by 7.3% before closures and 3.7% on a net basis after closures.
In its annual report, American Stores said it plans to spend about $1 billion this year on capital expenditures, for the third year in a row.
American anticipates opening 75 new combination stores and free-standing drug stores and remodeling 90 locations this year while closing 50, the report said. In 1997 American spent nearly $1.2 billion on 96 new combos and stand-alone drug stores, 65 remodelings and 68 closures, according to the report.
Although the number of remodelings will rise this year, the figure is well below the 198 remodelings that American completed in 1995, the report pointed out. "We do not remodel nearly as many stores as we used to," Lund said in the report.
"Moving forward, we will continue to execute our strategy of growth by investing in our stores and allowing our associates to better serve our customers," Lund said. "We are committed to this strategy and believe it is right for our business." American's format of choice is combination stores of about 65,000 square feet, the report said. "Our jointly-operated combination stores grow sales much faster and generate higher sales volumes than their traditional supermarket and stand-alone drug store counterparts," the report said.
According to the report, Acme Markets, Malvern, Pa., operates 56 combination stores, with plans to add about 10 more each year for the next four years, while Lucky Stores operates 40 combos with Sav-on Drugs in California and New Mexico, with plans to open approximately 40 more over the next two years.
The report did not indicate growth plans for Jewel-Osco in the Midwest, although it noted the chain recently expanded to Milwaukee.