SALT LAKE CITY — Associated Food Stores here said it had a net loss of $6.5 million for the fiscal year that ended March 26, though sales were up approximately 10% to an estimated $2.15 billion and patronage dividends for the member-owned cooperative rose 4%.
Rich Parkinson, president and chief executive officer, said the loss was due primarily to the acquisition in late 2009 of 34 stores from Albertsons, with $2.2 million of the loss coming from the closure of five of those stores plus two other corporate units.
He also said the company showed a 42% gain in its overall cash position. Combined with the increases in sales and the patronage dividend, “these were reassuring indicators that reflect the company's overall strength and may reflect positive changes in our surrounding local economies.”
Speaking at the company's annual meeting here, Parkinson said Associated's corporate stores — including the former Albertsons, re-bannered as Fresh Market, along with 22 other corporate units — are seeing “modest improvements in sales and customer counts,” despite the entry of Boise, Idaho-based WinCo Foods in the market.
Neil Berube, president of Fresh Market, said the acquisition of the Albertsons stores increased volume and efficiencies throughout the company's distribution system.
But the last year has been challenging for the Fresh Market group, he pointed out.
“We made a conscious decision to give every store we purchased an opportunity to turn things around,” he explained. “However, several stores simply could not reach the level of performance we needed, and they had to be closed to secure the long-term viability of our entire system.”
Associated closed five Fresh Market stores and transferred ownership of two others to Macey's, leaving it with 27 units. Those stores experienced positive results throughout 2011, Berube said, including gains in weekly store-to-store sales, guest counts and cash flow.
“Despite these positive results, we are operating in a tremendously challenging time and are battling against some of the most competitive retailers in the nation,” he added. “We expect to face additional challenges as we move forward, but we are confident in the store teams and their ingenuity to help us succeed.”