SALT LAKE CITY (FNS) -- Based on promising results, Associated Food Stores here plans to boost service to nonmembers to help propel growth, Richard A. Parkinson, president and chief executive officer, told SN at the wholesaler's annual meeting.
Associated's sales for the 1996 fiscal year ended March 30 climbed to $937.5 million from $842 million a year ago -- an 11.4% rise vs. recent annual gains of 2% to 4%, Parkinson told member retailers. Figures show that $45.3 million, or 47.2%, of the sales increase came from servicing nonmember Buttrey Food & Drug Co., Great Falls, Mont. The rest came from new or expanded stores, more purchases from members and the benefit of a 53-week year.
Associated had shied away from nonmember business before signing a cost-plus service deal in general merchandise with Buttrey last year. That deal included the purchase of the chain's Payson, Utah, general merchandise warehouse, Parkinson told SN. But now the cooperative sees such "auxiliary yet core-related business" as a plus for the company and its members, he said.
Although some Associated members compete with Buttrey stores, servicing the chain benefits all members through the resulting increase in purchasing power and economies of scale, Parkinson explained. Associated also is exploring prospects for further revenue growth through "cash and carry" sales to convenience stores, he added.
Altogether, the wholesaler is looking to raise sales through member and nonmember business by about $300 million a year, though that goal is several years away, Parkinson told SN.
Associated serves about 650 member stores, ranging from mom-and-pops to 68,000-square-foot units, in Utah, Idaho, Nevada, Wyoming, Colorado, Montana, Oregon and Arizona. It has full-line distribution centers in Salt Lake City; Boise, Idaho, and Billings and Helena, Mont.
In other news at the meeting: · Richard Jack Schaum, president of Stop & Shop, Ogden, Utah, was elected chairman, succeeding Gerald S. Day.
· The May 17 closing of Associated's Pocatello, Idaho, warehouse, which generated sales of $100 million a year, is slated to slice 1% off operating costs for the roughly 90 members formerly served by the facility, plus cut $700,000 in annual operating costs for the company. Parkinson said 75% of Pocatello's sales will be absorbed by the Salt Lake City warehouse, and the Boise facility will get the rest.
· Total funds paid to members in fiscal 1996, including cash rebates and interest on member holdings, rose 8.4% to $49.1 million from $45.3 million.