FLEMING IMROVES ABCO OPERATING RESULTS

OKLAHOMA CITY -- Fleming Cos. here said it has improved operating results at Abco Foods since it acquired the Phoenix-based chain through a foreclosure in early 1996. According to Fleming's annual report, changes at Abco have resulted in a rise in same-store sales, a positive cash flow and a dramatic drop in losses.The report said Fleming closed 14 of the 71 Abco stores, opened two new units and remodeled

OKLAHOMA CITY -- Fleming Cos. here said it has improved operating results at Abco Foods since it acquired the Phoenix-based chain through a foreclosure in early 1996. According to Fleming's annual report, changes at Abco have resulted in a rise in same-store sales, a positive cash flow and a dramatic drop in losses.

The report said Fleming closed 14 of the 71 Abco stores, opened two new units and remodeled five last year while eliminating a warehouse, making staff adjustments and changing operating procedures.

Abco is one of 12 regional chains that Fleming owns. The others are Baker's Supermarkets, Omaha, Neb.; Boogaarts Food Stores, Concordia, Kan.; Consumers Markets, Springfield, Mo.; Festival Foods, York, Pa.; Hyde Park Market, Fort Lauderdale, Fla.; Jubilee Foods and Market Basket, Buffalo, N.Y.; Rainbow Foods, Minneapolis; Sentry Foods and Supersaver, Waukesha, Wis.; and Thompson's Food Basket, Peoria, Ill.

Fleming's goal, according to the report, is for corporate-owned stores to account for 25% of sales by 2000. During 1996 they accounted for approximately 22% of sales.

According to the report, Fleming's capital expenditures this year will rise 12.4% to $145 million -- excluding any potential acquisitions, it noted -- compared with $129 million in 1996. "The $15 million increase+is due to a higher level of company-owned retail-store expansion and remodel activity," the report said.

It said Fleming invested in four new corporate stores and 41 remodelings and upgrades in 1996 while closing 62 unprofitable stores (including the 14 Abcos). In 1997, the report said, the company plans to open 13 new stores and remodel 24, along with completing three prototype footprints to streamline development costs.

Among other highlights of the annual report:

Fleming said it plans to completely reposition its controlled labels by consolidating the number of labels from 13 down to five -- BestYet, Piggly Wiggly, Rainbow, IGA and a line of upscale specialty products that has not yet been named -- "so that we can use size to strengthen our marketing and procurement for customers."

Fleming's goal, according to the report, is to develop its store brands within the next year by more than 6%, which, it said, is the average growth rate for the category in the industry.

In general merchandise, Fleming said its focus this year will be on sales growth -- particularly in specialty foods, seasonal and promotional products, expense control and continued financial improvement -- through both traditional distribution channels and new channels such as drug stores and small nonfood and specialty-food wholesalers.

Fleming also said it will continue to pursue a direct-import program for such staple general-merchandise items as kitchen, electrical and school supplies, which will carry Fleming-brand labels.

Fleming will attempt to expand its Fleming Retail Services operation, "[because] the margins associated with the retail consulting industry make it an attractive business," the annual report said.