At the Penn Traffic Company’s annual stockholders’ meeting yesterday at the Wyndham Hotel in Syracuse, Joseph V. Fisher, President and Chief Executive Officer, detailed the company’s vision for future growth.
“Our management and associates have a clear vision of who we are and a business plan to implement that vision, which is to operate conveniently located, modern supermarkets with a strong emphasis on quality perishables and customer service, providing our customers with a pleasant shopping experience,” said Mr. Fisher. “Our management and associates did a great job in implementing our business plan last year, and we’re off to a very good start again this year.”
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Mr. Fisher outlined for stockholders the four components of the company’s long-term strategy to increase sales and operating income:
— Reestablish a strong capital investment program
— Enhance our merchandising
— Improve store operations
— Reduce and contain costs
“We can see the early fruits of our strategic plan in our financial results for the past fiscal year and the first quarter of this year,” said Mr. Fisher.
“During this fiscal year, we plan to upgrade approximately 15 percent of the square footage in our stores,” said Mr. Fisher. “We expect to complete approximately 25 store remodels, open one replacement store and begin work on four or five new or replacement stores that will open next year. The $60 million capital program for this year will also fund improvements in Penn Traffic’s distribution, manufacturing and technology infrastructure.”
According to Mr. Fisher, two of the most exciting merchandising initiatives for Penn Traffic are its branded perishable programs and its customer loyalty card, the “Wild Card.”
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By GlobalData“We recently introduced branded programs in two more perishable departments, ‘Bakery Fresh’ in our bakery department and ‘Fresh ‘N Ready’ in our deli department,” said Mr. Fisher. “We have now introduced new programs in all of our key perishable departments over the past two years.” Penn Traffic launched ‘Garden Fresh Produce’ in the middle of last year and ‘Gold Label’ meats in the fall of calendar 1999.
“Our enhanced perishable departments make our stores a more attractive place to shop,” said Mr. Fisher. “We are optimistic that our relentless execution of our four branded perishable programs will result in increases in customer satisfaction and sales.”
Mr. Fisher noted that Penn Traffic expects to continue the rollout of the Wild Card later this year. “The Wild Card enables us to increase both sales and customer loyalty by enabling us to reward our best customers,” he said. Penn Traffic first introduced the Wild Card to its 70 Big Bear stores in Ohio and West Virginia in September 2000, and already has signed up more than a million customers in its Big Bear markets.
During his remarks, Mr. Fisher outlined a number of cost reduction and cost control programs that Penn Traffic is currently implementing, including:
- Work simplification programs and improved scheduling of employees, which will improve productivity and customer service
- Logistics improvements, such as improved truck routing and trailer utilization, which will reduce distribution costs
- Continued reductions in inventory shrink expense
- Commencement of the use of business-to-business electronic commerce to reduce the cost of nonresaleable products
“While pursuing exciting merchandising and cost-cutting initiatives, we will not forget our focus on providing the highest levels of customer service,” said Mr. Fisher. “We will keep looking for new ways to improve service to our customers.”
A number of the statements set forth above, including statements containing the words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “projects” and similar phrases are “forward-looking statements” for purposes of the Securities Exchange Act of 1934, as amended. These statements are subject to numerous assumptions and uncertainties. Assumptions and other considerations that could cause actual results to differ from those set forth in the forward-looking information can be found in the Company’s filings with the Securities and Exchange Commission, including the Company’s Form 10-Q. The Company does not undertake to update forward-looking statements in this news release to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking information.
The Penn Traffic Company is based in Syracuse, New York, and operates 220 supermarkets in Ohio, West Virginia, Pennsylvania, upstate New York, Vermont and New Hampshire under the “Big Bear,” “Big Bear Plus,” “Bi-Lo,” “P&C” and “Quality” trade names. Penn Traffic also operates wholesale food distribution businesses serving 84 licensed franchises and 72 independent operators.
