FOODLAND: REMODELING, EXPANSION DRIVE PROFITS

ARTHUR HAGOPIAN

PERTH, Australia (FNS) -- Foodland Associated here said its Action supermarket chain had first-quarter comparable-store sales rising 4.5% and net sales up 19.7%.

Don Humphreys, Foodland chairman, said profits have grown 60% over the past five years, to a record $40 million last year.

He told shareholders at the annual general meeting that in Western Australia first-quarter sales were in line with last year despite lower sales by Cash and Carry and Food Service, the latter reflecting the decline in the Western Australian food service market.

"Margins have strengthened and wages and other costs continue to run in line with the previous year," he said.

During the year the company's wholesale operations introduced the "Signature Range" of premium house brand grocery products, aimed at value-conscious consumers, with plans to expand significantly the range over the next 12 months.

He said 22 of Action's 28 stores are now trading in Action's new format. The remodeling of five of the remaining six stores will be undertaken during fiscal 2001, completing Action's remodeling program, which began in 1995 and is reflected in the 50% hike in Action's sales since 1996.

Early in 2001, Action said it expects to achieve a significant milestone when its annual sales exceed $265 million for the first time, he said.

"Action continues to search for opportunities to acquire existing supermarkets and new greenfields sites," he added.

In New Zealand, the store remodeling program, which began with trials of the new Foodtown and Countdown supermarket formats in late 1998, is continuing.

"Foodtown market share is growing, and Countdown store openings and remodelings already completed are expected to produce market share growth for Countdown from the start of December this calendar year," he told shareholders.