CENTRAL ON PROFITABLE PATH ----- TO MERGER

PAT NATSCHKE LENIUS

DES PLAINES, Ill. -- Central Grocers Cooperative continues on a healthy growth curve despite ongoing speculation about a possible merger with its chief competitor for independents' business in the Chicago market.

At a recent meeting here of the Merchandising Executives Club of Chicago, the company's plans were discussed by Joe Caccamo, executive vice president and general manager; Jim Denges, vice president of marketing and purchasing; and Bob Wagner, vice president and assistant general manager.

For years, local trade sources have questioned the need for two cooperatives in the Chicago market -- Central Grocers in Franklin Park, Ill., and Certified Grocers Midwest, Hodgkins, Ill. -- and have hinted that combining Central and Certified into one cooperative would be wiser. The question was posed again at this meeting.

"Everything is possible," Caccamo answered. "We talk about [merging], then we stop talking. It is possible. But not this year."

When not discussing merger, Central and Certified are aggressively competing for the role of top-ranked independent wholesaler in the market.

Asked whether one of Certified's more prominent members, Paul Butera of Butera Finer Foods, might switch to Central, Caccamo laughed and pointed to two Certified executives in the audience, saying that they were attending the meeting as his guests.

"I can't answer that question unless my guests from Certified leave the room," Caccamo said, after introducing Mike O'Neill and Ed Bradley of Certified.

After 15 years of continuous leadership by Caccamo and his management team, Central Grocers believes its goal to become the No. 1 independent grocery wholesaler in the Chicago area is attainable in the near future, Wagner said.

Now in its 79th year in business, the cooperative reported sales of $464 million in fiscal 1996, a 107% increase since 1982, when sales were at $225 million, Denges said.

Earnings have been even better, said Wagner. They jumped 1,900% in the same period, from $600,000 in 1982 to $12.1 million in 1996.

Allowances paid to Central's member retailers, separate from the rebates paid from earnings, have increased 255% over the last 15 years, from $8.1 million in 1982 to $28.7 million in 1996, Denges said.

"One of our goals is to get allowances out to our members," he noted. Experienced leadership is cited as one of the reasons for Central's success, Wagner said. Caccamo, Wagner and Denges collectively have served more than 80 years with the cooperative.

Some of the largest independents in the Chicago area are Central members, such as Strack & Van Til, Walt's, Sunset Foods and Logli, Denges said.

Central's member retailers are responsive to vendors in following programs, adjusting and listening to joint programs at headquarters, he pointed out.

The cooperative's plans for the future include combining all perishables, refrigerated and frozen, into one 150,000-square-foot location in the next year or two for greater efficiency, Wagner said.

Central built a 20,000-square-foot perishables cooler in 1984 and a 72,000-square-foot freezer in 1990, but increased demand for perishables and the flood of new frozen items in recent years have made further expansion necessary, he said.

A separate warehouse will be used exclusively for dry grocery, general merchandise and health and beauty care.

Denges said that Central will be expanding its nonfood offerings. About 2,000 nonfood items were added to its warehouse last fall, but much more will be added, he said. A 90,000-square-foot facility for general merchandise and health and beauty care was opened in 1995.