BOISE, Idaho (FNS) -- Albertson's executives cited new stores, retail renovations, distribution improvements and new technology in detailing the chain's aggressive capital expenditure plans at its annual meeting here.
Under the five-year program, Albertson's is slated to spend roughly $3.8 billion by the end of the year 2000, Gary Michael, chairman and chief executive officer, told shareholders. He said the investment will be allocated as follows:
$2.8 billion to open 388 new stores in new and existing markets.
The chain, now with 778 stores in 19 states, expects to have 1,100 by the end of this decade. It opened 14 stores in this year's first quarter and is scheduled to expand into its 20th state, Mississippi, in the fourth quarter. A total of 68 new stores are planned this year.
$613 million to remodel 265 stores, including 22 expansions. This year, 43 remodels are planned.
$178 million to enhance the chain's distribution system.
$113 million for new information systems and technology.
$110 million to replace and upgrade existing retail equipment.
"We can do all of this because our balance sheet is strong," Michael told stockholders. "It allows us to repay
debt, support our retail operations, make acquisitions and purchase company stock if we so choose. The bottom line is that we have the financial strength to do it all."
Albertson's also announced results for the 13-week first quarter ended May 2. Sales rose 8.4% to $3.3 billion from $3.1 billion. Identical-store sales increased 2.4%, and comparable-store sales (which include replacement stores) were up 2.7%. Net earnings jumped 13.2% to $112.4 million (45 cents per share) from $99.3 million (39 cents per share).
Also part of the cap-ex plan are initiatives designed to boost customer service, convenience and the overall appeal of Albertson's stores -- to "keep the spice in Albertson's recipe for success," Richard King, president and chief operating officer, told shareholders.
Those efforts, he said, include new cash registers with a monitor that shows customers their purchases, thermal printers at checkout that print out receipts faster, more in-store banking services and supermarket pharmacies, and the rollout of the Quick Fixin' prepared food program.
By the end of the year, Albertson's plans to have 300 stores with full-service banking, King said. Its in-store banking services currently include 561 automated teller machines and some full-service banks. In the past four years, the chain has doubled its number of in-store pharmacies to 480, and expects to maintain a rapid pace in pharmacy additions, he noted. The Quick Fixin' deli meal program, which includes 10 entrees, has been test-marketed in southern California and will be rolled out chainwide this year, he added.
The company also is starting a computer-assisted employee training program that involves touchscreen computers, and it has implemented new merchandising programs to save customers time and give them more information on the products they buy, King said.
"All of this is intended to keep the emphasis where it belongs: on customer service. We want our customers to leave our stores feeling that Albertson's is their store," he said.