Harris Teeter 2003 Annual Report Download - page 6

MAKING HARRIS TEETER SUCCESSFUL Fiscal 2003 was a very difficult time for the supermarket industry.
However, Harris Teeter managed to deliver comparable store sales gains of 0.98% and improved its operating margin
to 3.85%. This was the fourth consecutive year of improved margins and we are diligently working to achieve further
improvements. We also recognize that the supermarket industry is expected to continue to face long-term competitive
challenges including those from other retailers that are expanding their product assortment. Competition must be
viewed across all of the retail channels rather than just within the grocery sector. For Harris Teeter, these challenges are
being met with strategies that continue to differentiate the shopping experience for our customers.
Providing superior customer service We have always recognized that superior customer service is essential to
attracting and retaining repeat shoppers. Harris Teeter associates are trained using the latest technology to enhance their
overall product knowledge and expertise, in addition to helping customers find those products in our store. They are also
trained to be friendly and make our customers feel comfortable. We routinely audit ourselves against our competition to
ensure that we consistently deliver superior customer service to each and every customer. During the summer of 2003,
Harris Teeter was recognized by three different publications for our customer service and product delivery.
Item selection We offer a merchandise mix that is unique and appealing to our customers. As a further
convenience for our customers, we have expanded our selection of health and beauty care items, and added pharmacies
to new stores and existing locations where feasible. We have a pharmacy in almost 30% of our supermarkets.
Attractive stores We recognize that clean, attractive and well merchandised stores appeal to our customers and
make a difference. We have continued to invest in new stores and remodel older stores to ensure that all stores are kept
up to our highest standards. We regularly adapt our store format to the neighborhood to provide an appealing and
convenient setting specifically for those customers who shop us in that market.
Private label Last year was the first full year with our Harris Teeter Rancher®beef program. This program has
been very successful for us and we are thrilled with the positive customer response. Our shoppers demand consistent
quality and exceptional value, and the Harris Teeter Rancher®beef program delivers.
By working with a consortium of ranchers and processors who provide Harris Teeter with a branded beef, Harris
Teeter has been able to ensure that our shoppers receive the highest quality meat available. Hand selected for Harris
Teeter, this beef meets our high standards for tenderness and is consistently more tender than USDA select or choice.
Our Harris Teeter Rancher®brand beef invariably provides customers with a higher value, something they’ve come to
expect from Harris Teeter.
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HARRIS TEETER
RUDDICK CORPORATION & SUBSIDIARIES ANNUAL REPORT TWO THOUSAND THREE
Total Sales
IN BILLIONS OF DOLLARS
99 00 01 02 99 00 011 02103 03
2.27
2.33
2.42 2.35 55.4 59.1 31.8 88.8 2.43 93.6
Operating Profit
IN MILLIONS OF DOLLARS
1 Includes exit and impairment
charges (credits) as follows:
'02 – $ (0.7)
'01 – $ 45.0