ANCHORAGE, Alaska (FNS) -- Carr Gottstein Foods here has pulled back on expansion for this year, focusing instead on growing sales in its existing stores, fine-tuning operations and paying down debt. For now, Carr Gottstein doesn't plan to proceed with an expansion into the Pacific Northwest, a move it had been studying, Mark Williams, president and chief executive, told shareholders at the company's annual meeting here. Instead, the retailer will emphasize leveraging its investment in its Alaska stores. Carr Gottstein also plans to sharply reduce its capital budget. Over the past five years, it has spent more than $100 million on expansions and renovations. The company added new stores in southeastern and western Alaska and upgraded nearly all its stores to include more departments. Since that work is done, this year's capital budget is a modest $5.5 million -- less than a third of what the company spent last year. That will cover some remodeling of several Carrs stores plus the openings of a half-dozen tobacco stores. Last month, the company launched a new division, the Great Alaska Tobacco Co.
Although Carr Gottstein isn't looking to grow its Carrs Quality Centers division this year, it will continue to seek opportunities to expand its Eagle Quality Centers operation. Williams said he's looking either for places to build new Eagle stores or for stores to acquire and convert to the smaller-format markets.
Company growth will be an issue in upcoming labor negotiations. The contract covering nearly 2,000 union workers in the Anchorage area expires June 1. The two-year deal negotiated with the United Food and Commercial Workers union included no pay increases for workers. Raises are likely to be a top issue at the bargaining table this summer. Williams said he's begun discussions with union officials.
Williams also praised his management team for weathering the competitive storm of the past two years, marked by the influx and expansion of discounters and warehouse clubs plus an expansion by Fred Meyer Inc., Portland, Ore. The resulting competition squeezed the company's comp-store sales, but Carr Gottstein managed to rack up record sales of $601 million for 1995.
The company plans to devote profits to paying down debt and growing the business, according to its annual report. Total debt at the end of March stood at $246 million.
