NORTHLAKE, Ill. -- Dominick's Finer Foods here presented shareholders with a triple helping of good news at its first annual meeting as a public company last week.
It reported record first-quarter results, disclosed plans to convert the two Chicago-area Byerly's stores it has acquired to its Fresh format, and said it would launch a more aggressive marketing effort for its Fresh Values loyalty card following a better-than-expected introduction.
Interviewed after the meeting Robert A. Mariano, president and chief executive officer, sought to squelch persistent reports in the local trade that Dominick's plans to sell its 17 Omni Superstores to Cub Foods.
"Omni is not for sale," Mariano told SN.
However, he declined to comment on another report making the rounds here that perhaps Supervalu, the Minneapolis-based distributor, would sell its 17 local Cub Foods stores to Dominick's. A Supervalu official also declined to comment on the reports.
Dominick's said its record results for the 12-week quarter ended Jan. 25 showed net income at $5.2 million, compared with a net loss of $839,000 a year ago, and sales up 3.2% to $602.9 million.
The company said same-store sales declined 0.7%, which Mariano attributed to "substantially greater remodel construction activity, which caused some disruption in 12 stores. In addition, we believe this year's shortened holiday season also impacted our sales."
The company said operating cash flow hit a record level of $35.9 million, or 6% of sales -- also a record -- compared with $29.9 million a year ago.
Mariano said Dominick's acquired two Byerly's stores in the Chicago area -- for an undisclosed price -- "which further accelerates our new store opening program." (For more on that acquisition, see story Page 1.)
He told SN the two stores will be converted to the Dominick's Fresh format following "some modest adjustments in layout," including the addition of pharmacies at both stores, which will be accomplished by relocating the stores' cooking school to an area formerly leased to an ice cream vendor.
The stores, whose sale was scheduled to close last Thursday, are located in Highland Park and Schaumburg, Ill. Both are approximately 70,000 square feet and both opened last spring.
Byerly's said last week it was selling its other 11 stores, all in Minnesota, to Lund Food Holdings, operator of Lunds Food Stores, Minneapolis. However, it sold the two Chicago-area stores separately because Lunds did not want to pursue a Chicago strategy, a Byerly's spokesman told SN.
Mariano said the loyalty cards that Dominick's introduced during the first quarter have experienced "strong acceptance, [and] our main goal over the next several quarters will be to effectively utilize the data we're now collecting to develop aggressive marketing programs tailored to our customers' buying patterns."
