SALT LAKE CITY -- Victor L. Lund, American Stores Co.'s chairman and chief executive officer, said the company is "on target" with its Delta project -- the series of re-engineering initiatives designed to convert American Stores from a holding company to a centralized operating company.
Speaking at the company's annual shareholders meeting here last week, Lund said that by the second half of the year -- and for the first time since its inception -- Delta is expected to show benefits exceeding costs. Progress has been made in key areas, including centralized procurement and warehouse consolidation, he said.
Lund told shareholders that for the first time since 1990, sales increased from the prior year, to $18.7 billion in 1996 compared with $18.3 billion in 1995. Since 1990, the company has been selling operations and stores that do not fit in with corporate strategy, but now that process is "about over," he said.
Lund said operating profit, before Delta-related expenses, was $787 million, or 4.2% of sales, compared with 3.4% of sales three years ago.
Lund said the price of the company's stock has increased 175% over the past five years. Last year, the company's stock price rose 64%, according to the annual report. Last Thursday, shares closed at $49.63, up $1.75.
American Stores' aggressive capital plans yielded 122 new, replacement and acquired stores, Lund said. The company currently has 1,699 food, drug and combination stores in 27 states. Lund said the company projects 100 new stores this year.
David Maher, American Stores president and chief operating officer, said the company's new building in downtown Salt Lake City will be called American Stores Center, and will be open in January 1998.
Lund also praised the "courage, tenacity, commitment and sacrifices" made by associates in implementing the retailer's many initiatives for change.