Albertson's Shifts Gears
Albertson's is shifting its business from a strictly operational focus to more of a customer orientation, said Richard L. King, president and chief executive officer of the Boise, Idaho-based chain.
According to him, "To win business, we must do the right things right." "We're changing from a purely operational focus to a customer/marketing focus as our formula for success. We're moving from merely supplying goods to also understanding customer-service needs.
"We're doing everything we can to put pressure back on sales, and we just need to stay focused on basics and implement the programs we have out there and make sure they are executed properly," King said.
"We need to continue to work on destination categories and get more people into our stores, and we need to make sure we use advertising tools most effectively, and our sales trends will improve."
He said Albertson's was disappointed with its comparative sales results in January but expects sales to pick up.
According to A. Craig Olson, senior vice president of finance and chief financial officer, comparable-store sales for the quarter ended Jan. 28 were virtually flat, up only 0.3%.
He said January sales were negatively affected by the shift of New Year's Day into the prior four-week period and the shift of the Super Bowl from Jan. 25 a year ago to Jan. 31 this year. "Without the Super Bowl, our comparisons were flat for January," Olson said.
He said the company's goals for reversing the flat sales trend include increasing the number of in-store banks from 29 to 560 by year's end "because they are good traffic builders and a good source of rental income"; and increasing the number of fuel centers from nine to 17 this year, with plans to move faster in the new year and a five-year goal of 600.
According to King, Albertson's expects an August opening for a new 730,000-square-foot full-line distribution center in Tulsa, Okla., which will supply stores in the Midwest and the Mid-South.
Olson said the merger with American Stores -- expected to close later this year -- should result in cost savings of $600 million over three years, including $100 million the first year, $200 million the second year and $300 million the third year.