Harris Teeter 2000 Annual Report Download - page 21

16 Ruddick Corporation and Subsidiaries 2000 Annual Report
We also made investments this year in new warehouse space.
We completed the expansion of our frozen food warehouse in
Greensboro, North Carolina, and built in enough additional
capacity for at least five years. In addition, the installation of a
single pick facility for health and beauty care products and other
general merchandise created more capacity and reduced the costs
associated with the use of distributors. We continued to see
expansion of our gross margins and productivity improvements
at the store level, reflected in an increase again this year in sales
per employee hour. We attribute this growth to the continued
success of our store-level productivity initiatives and the identi-
fication and implementation of best practices in our stores. Our
control of waste still presents a major opportunity for improve-
ment at Harris Teeter, however, and we have identified it as an
operational priority for the new year. To help us carry out our
operational and sales objectives we were pleased to recruit sev-
eral new key executives this year, including Rod Antolock,
our Senior Vice President of Operations and Merchandising,
who joined our organization from Albertson’s. Also new at the
end of fiscal 2000 was Express Lane, Harris Teeter’s Internet-
based shopping service designed for our busy customers who
find online shopping simpler and more convenient. Express Lane
was thoroughly tested at one store during the year and expansion
is planned for 2001.
American & Efird: Global Opportunities Lead the Way
Sales results for A&E continued to be negatively impacted
by several factors: slowing retail sales, increased apparel imports
into the U.S. market and a competitive pricing environment.
Sales in the U.S. continued to decline as our customers moved
their operations to lower-wage countries around the world.
A&E is well positioned to supply customers in Latin America
and continues to expand operations in Asia. Foreign sales growth
continues to be strong.The United States-Caribbean Basin Trade
Partnership Act, which took effect in October 2000, eliminates
duty on all apparel made of U.S. fabrics from U.S. yarns coming
out of the Caribbean Basin and is already having a positive
impact. We anticipate that the bill will increase demand for
U.S.-manufactured sewing thread in the region as more apparel
sourcing shifts back to this hemisphere from Asia. Further,
A&E was pleased with the sales expansion this year in our
filament, or non-apparel, thread sales and in the launch of our
new embroidery thread product, Signature®;we believe both
products have strong future growth potential.
A&E made considerable progress this year in the expansion
and upgrading of our facilities. At year end we had begun
construction of our southern China dyeing and finishing facil-
ity which will expand our capacity to support planned growth
in Asia.
Absolutely. A&E is doing a terrific job of continuing to diversify our product lines and expand-
ing sales outside of the U.S. These improvements constantly make A&E a more attractive
business by reducing our exposure to temporary downturns in specific market segments
or to issues in one or another part of the world. For example, increasing sales in the non-
apparel, or filament, side of the thread manufacturing business, allows us to pursue a much
wider variety of sales opportunities for greater value-added products and protects us against
disruptions in the apparel market. The introduction of our superior embroidery product and
the expansion of the specialty bobbin business also provide us with a greater range of capa-
bilities to offer our customers. In addition, with apparel manufacturing moving rapidly out of
the U.S. it is critical that we continue to actively pursue new and existing sales as our man-
ufacturers relocate facilities. We need to be in a position to take advantage of new trade
legislation favoring any part of the world, such as, most recently, the Caribbean Basin. And
A&E continues to build the necessary infrastructure to add capacity, especially in promising
growth products such as filament thread and bobbins, as well as in growing markets such as
Asia and the Indian subcontinent. These opportunities also remain A&E’s greatest chal-
lenges; we must continue to react rapidly to the significant changes in the structure of our
marketplace and stay one step ahead. Making certain that our current and future customers
specify A&E thread in their manufacturing process no matter where in the world it is taking
place will obviously build our share of the market.
Could you answer these
same questions for A&E?