INDIANAPOLIS -- Marsh Supermarkets here has budgeted $35 million for capital expenditures in fiscal 1995 -- about 21% less than it spent last year.
The chain will spend the money to open two new Marsh supermarkets, a new LoBill Foods unit and five Village Pantry convenience stores and to acquire "several sites" for future store development, according to the chain's annual report.
In fiscal 1994, Marsh spent $44.3 million to open six supermarkets (including two LoBill limited-assortment stores) and five convenience stores, increasing selling area by 9.7%. The chain historically has expanded its square footage by about 3.5% per year, the annual report said.
Marsh operates 80 Marsh Supermarkets and seven LoBill Foods units, which account for 73% of its $1.3 billion annual sales. It also operates 177 Village Pantry convenience stores and Convenience Store Distributing Co., a convenience-store supplier.
LoBill stores, according to the annual report, achieved a 42% increase in sales last year, when two units were added to the base of five, and a 5.4% increase in same-store sales. Additionally, one older supermarket was converted to the LoBill format.
Don Marsh, chairman, president and chief executive officer, said in his letter to shareholders that Marsh has attempted to position itself for increased sales and profits, and to streamline its operations as a means of offsetting the effect of a major competitor's entry into its market.
That competitor, Meijer Inc., Grand Rapids, Mich., has opened two stores here and two more units in other parts of Indiana. Additional openings are expected later this year.
Among the elements of the chain's repositioning are:
· An updated image campaign that focuses on customer satisfaction through the theme, "Marsh is Gonna Make You Smile" with its selection, service, convenience and value.
· An increased use of electronic media and an effort to tailor print ads to each store's demographics and merchandise offerings.
· A frequent shopper program called Fresh I.D.E.A. (Instant Discounts Electronically Applied). Introduced last spring, the program signed up more than 40,000 people in the first few weeks.
As part of an expense reduction program prior to Meijer's arrival here, Marsh eliminated 70 nonretail positions (15% of its headquarters staff) by realigning corporate headquarters responsibilities and improving warehouse and transportation operating efficiencies, the report said.
The company expects to realize annualized savings from these changes of $2 million after taxes, the report said.