SALT LAKE CITY -- Smith's Food & Drug Centers here said lower net income and sluggish sales in 1993 are due to continuing recessionary pressure in California and its aggressive pricing program in Utah.
t of those in California.
Additionally, Smith's said it will reduce new stores from the current average of 75,000 square feet to between 54,000 and 66,000 square feet. The new, smaller format will have a lower break-even point and produce a better return on investment.
Smith's opened eight combination stores in California last year. Smith's executives previously said 20 sites had been secured in California and could be developed in 1994, about 10 more stores than the company now anticipates opening.
Net earnings for 1993 totaled $45.8 million, a 14.6% decline.
Sales increased 6% for the year to $2.81 billion.
Jonathan Ziegler, a securities analyst at Salomon Bros., New York, said Smith's results were "better than I was looking for and I was looking for down results." In spite of negative same-store sales, Smith's lowered its expense ratio (excluding depreciation) by 102 basis points to 14.94% of sales in the fourth quarter, Ziegler said.