MINNEAPOLIS -- Calling its same-store sales performance "obviously disappointing," Nash Finch Co. here said it intends to focus on improving the marketing of its corporate stores in 2004.
During a recent conference call with industry analysts to discuss financial results for the fourth quarter and fiscal year ended Jan. 3, Ron Marshall, chief executive officer, said Nash Finch was prepared for "a long slog" that could take "the greater part of this year" to improve the performance of its corporate stores.
In an effort to cut labor and health care costs, the company began store-by-store layoffs last week at some of its over 100 corporate stores. The number of employees affected were not disclosed.
In the quarter, same-store sales declined 7.7%, while in the year they fell 10.6%. For the year, sales in the retail segment decreased 6% to $966.3 million, and segment profit was down 10.4% to $30.2 million.
The company reported that retail profits were affected by the $4 million the company spent to open three more of its Hispanic-themed Avanza stores: one in Pueblo, Colo., and two in Chicago.
Marshall noted that he was particularly disappointed with the performance of the two Chicago Avanzas. "We aren't happy with what's happening there. It's difficult to rise above the noise level with just two stores."
The stores themselves, he noted, were not the problem. "There's nothing customers don't like once we get them in there."
Marshall observed that marketing, not store quality, was behind the company's poor retail sales record in general last year.
Of the company's corporate stores, 31% fall behind the No. 1 or No. 2 players in their respective markets. Marshall said plans for those stores "cover the entire spectrum." Food-distribution sales in fiscal 2003 rose 4.9% to $1.9 billion, and segment income increased 3.9% to $63.9 million.
Nash Finch attributed these increases to new customers gained from Fleming, Dallas, exiting the distribution business.
In the company's military segment, sales for the year rose 6.9% to $1.09 billion, and segment profits grew 3.3% to $31.3 million.
Overall, sales for the 13-week fourth quarter rose 14.8% to $1.01 billion. Excluding the sales from the quarter's extra week, sales would have been $943 million.
In the 53-week fiscal year, sales grew 2.6% to $3.97 billion. Excluding sales from the year's extra week, sales would have been $3.9 billion.
Qtr Ended*: 1/3/04;12/28/02
Sales: $1.01 billion; $880.8 million
Net Income: $13 million; $7.6 million
Inc/share:$1.05; 64 cents
52 Weeks*: 2003; 2002
Sales: $3.97 billion; $3.87 billion
Net Income: $35.1 million; $23.6 million
*Fourth-quarter 2003 had 13 weeks, vs. 12 in fourth-quarter 2002; fiscal-year 2003 had 53 weeks, vs. 52 in fiscal-year 2002.