GRAND RAPIDS, Mich. -- Calling fiscal 2004 a year of "significant and steady progress," Craig Sturken highlighted Spartan Stores' improved outlook 18 months into a turnaround strategy he began when he was named chief executive officer of the distributor-retailer in March 2003.
Speaking at the company's annual meeting here, Sturken, who also is chairman of the company, noted efforts to shore up Spartan's financial condition, cut costs and grow retail sales helped raise Spartan stock by 73% since March 2003 and resulted in an operating profit of $12.6 million in 2004 compared with a $38.4 million loss in 2003.
"Our business fundamentals are more stable today than they have been in more than two years," Sturken said. "We substantially improved our financial and operating performance in what can be characterized as the most competitive market environment in our company's history."
Sturken said Spartan's "consumer-centric business strategy" would help it succeed in Michigan's competitive marketplace, which now includes 109 supercenters with more on the way.
"Competing effectively in this market will depend on our ability and our independent customers' ability to be outstanding retail operators," Sturken said. "The grocery industry is filled with examples of independent retail operators that are thriving in this challenging environment. We are absolutely committed to developing excellence in our retail operations and to helping our independent customers be the very best operators in their markets."
Specifically, Spartan is focusing on improving its category management function, which Sturken called "one of our strongest near-term sales and profit growth opportunities." He said the company is aggressively enhancing its Spartan-brand private-label program, which he called "an underdeveloped asset with significant growth potential."
Other near-term growth initiatives include adding fuel centers to some stores, establishing a warehouse for slow-moving and specialty items, improving technology and shrink control, and launching a comprehensive marketing strategy to build a "neighborhood market" brand identity for Spartan's stores, Sturken said.
Sturken said he has been at work for several months on a comprehensive long-term strategy "designed to establish a firm leadership position in our markets by implementing a distinct retail strategy." He said details will be finalized during the 2005 fiscal year.
In other business, Spartan shareholders elected Sturken and Gregory P. Josefowicz to three-year terms on the board of directors. Josefowicz is president and chief executive officer of book and music retailer Borders Group, Ann Arbor, Mich.