CERRITOS, Calif. — The uncertainties surrounding the recession will not keep Unified Grocers from achieving long-term financial success, Al Plamann, president and chief executive officer of the Los Angeles-based cooperative, told retail members at the company's annual meeting here last week.
“We will not be a victim of this downturn,” Plamann declared. “We will survive, and we will thrive.”
While 2008 was a year of record highs — with sales of $4.1 billion, which exceeded expectations by more than $150 million, and pre-tax earnings up more than 16% following the acquisition early in the year of Associated Grocers, Seattle — Plamann said he expects 2009 to be a challenging year.
“Unfortunately, many of the problems that have negatively impacted our economy continue to persist, and consumer confidence levels remain at all-time lows,” he pointed out. “In many respects, we seem to be facing a perfect economic storm that keeps feeding on itself, regenerating and then moving on to new targets.
“The worst part is, no one seems to see any trailing blue sky yet.”
Still, Plamann said he is optimistic about Unified's future for several reasons, which he outlined during his presentation to the meeting:
Strengthening of its capital resources. Unified recently expanded the capacity of its revolving credit agreement by $25 million, at existing favorable rates, “to ensure that we have resources to support the needs of retail members and customers,” he noted.
Urging member retailers to focus on expense reductions and “conserve as much cash as possible, [because ] in this environment, obtaining financing is very difficult.”
Launching a series of seminars for employees to help them cope with difficulties caused by the recession, and initiating other measures like van pools to help employees get to and from work conveniently and efficiently.
The growing availability of real estate, with prime locations coming on the market due to store closures by national and regional operators, “[giving] independent retailers looking to expand or grow their businesses many more options than they [had] only a few short months ago.”
Changes in consumer spending, which offer “a perfect opportunity for retailers to capture new sales. When shoppers abandon one product for cost, they look for new product solutions at retail, and with Unified's wide product offering, we are confident independents can capture new sales from consumers who are simply looking for something different.”