OKLAHOMA CITY -- Fleming Cos. here said it has revamped more than 10% of its operations -- representing $1 billion in sales -- under its Vision 2000 re-engineering program rolled out in January.
The two-year program is on schedule and already beginning to yield results, Robert E. Stauth, chairman, president and chief executive officer, told shareholders during the company's annual meeting here this month.
For instance, the company recently snared a major new customer with the help of Vision 2000's flexible marketing plan -- Brown & Cole, a 13-store chain in Washington and Oregon, which Stauth said would bring more than $36 million in new sales to Fleming. The wholesaler will service seven Brown & Cole stores that had previously been supplied by Associated Grocers, Seattle.
While the re-engineering is progressing smoothly, there was an effect on first-quarter earnings -- a trend likely to continue for the remainder of the year, Stauth said.
Net earnings for the 16 weeks ended April 22 were $19.5 million, down 19.9% from the first quarter of 1994.
Sales for the first quarter were $5.5 billion, up 36% from the same period in the prior year. The increase was primarily attributable to the company's acquisition of Scrivner in July 1994.
Food distribution sales were $4.5 billion in the first quarter, up 20% from the prior year. Operating earnings for the segment were $63 million, down 12%.
Retail food sales were $1 billion, an increase of $700 million over the prior year. Retail food segment operating earnings were $1.8 million vs. $100,000 for the year-ago quarter.
Stauth admitted that Fleming has faced some challenges trying to integrate Scrivner's retail operations. "It has been difficult getting the Festival Foods stores integrated into our Baker's operation in Omaha [Neb.] and we've had challenges in Des Moines [Iowa] and Buffalo [N.Y.]," he said.