Harris Teeter 1997 Annual Report Download - page 6

Ruddick
RUDDICK CORPORATION
4rivals any of our competitors in terms
of variety as well as price. These quali-
ties have allowed us to differentiate
ourselves in a competitive environment
that has become increasingly intense
and shows no signs of abating. It is
therefore more important than ever to
continually enhance our execution.
For Harris Teeter, the first step in
the process is finding the right store
locations. Unlike some of our com-
petitors, our goal is not to continually
add or remodel stores in order to
simply build market share. We careful-
ly study a wide range of unique demo-
graphics and density data aimed at
identifying selected locations that fit
our customer profile and meet
our financial objectives. Ruddick
Investment works hand in hand with
the real estate team at Harris Teeter to
locate sites and, over time, to increase
the percentage of properties that we
own. Owning, rather than leasing,
stores gives us greater flexibility, helps
us control our fixed costs and allows us
to take advantage of our larger
capital base to return greater value to
our shareholders.
At the store level, execution means
effective and efficient store manage-
ment. We have undertaken a number
of strategic process initiatives that
we expect will have a growing and
positive effect on future profitability.
We know, for example, that compre-
hensive training in sales and service
will have a direct impact on attracting
and retaining customers as well as
reducing labor and turnover costs.
We have put in place specific tracking
procedures to make certain that each
and every associate is given the appro-
priate training. The successful rollout
of our VIC (Very Important Customer)
Card program system-wide has not
only helped build customer loyalty by
rewarding our repeat customers, but
has also provided us with better
merchandising information. More
accurate data collection and the pru-
dent use of information to improve
sales, reduce shrinkage and help our
store managers control other costs is
integral to our strategy. We have
enhanced the integrity of the data we
collect from our registers and else-
where, including from our customers,
and taken a much more aggressive
approach to category management.
A new standardized and more
detailed measurement and feedback
system has been recently completed
that will allow us to more fully under-
stand and put to use our successes
and failures at each individual store.
Distribution, Systems and Promotion
From a company-wide perspective,
Harris Teeter will be ready in early
1998 to utilize the expanded full-
service warehouses in Greensboro and
Indian Trail, North Carolina, which
will provide us with greater cap-
acity for the future and will increase
our distribution efficiency. In the
near term, in reduced mileage alone,
the distribution system is anticipated
to save us over $1million annually.
One of our basic strategies at
Harris Teeter is to offer the best in
prepared home meal replacement
foods. We have recently undertaken a
new and comprehensive evaluation of
the systems we currently use to create
and distribute these foods to determine
the most cost effective methods while
continuing to enhance food quality.
We have recently launched a new
aggressive television advertising and
marketing campaign that emphasizes
our quality and selection as well as our
competitive prices. We have commit-
ted to being our best during the peak
early evening store hours, a time tradi-
tionally perceived by shoppers as
crowded and short on fresh foods.
Improving Execution Every Day at A&E
Like Harris Teeter, American & Efird
is well recognized for providing the
highest quality products and for man-
aging inventory to deliver precisely
what, where and when a customer
orders. In addition, execution improve-
ments are an everyday way of life
for A&E, both to improve the actual
manufacturing process and to increase
the number of manufacturing locations
in order to better and more cost effec-
tively serve our expanding internation-
al customer base.
We are approaching completion of
the modernization of our largest dye-
ing and finishing facility where we dye
small and large lots in order to meet
the demands of our customers for
quick response while still controlling
our inventory carrying costs. A&E is
well known worldwide for our pro-
AND SUBSIDIARIES