Harris Teeter 2005 Annual Report Download - page 6

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Ruddick Corporation & Subsidiaries Annual Report 2005
As part of our customer service commitment
we have continued to utilize the Harris Teeter
Very Important Customer (VIC) rewards
program that provides our loyal customers with
superior value. The VIC program features
special pricing and frequent shopper rewards
that create excitement for our customers,
and provides information that enables us to
best merchandise our individual locations.
We continually look for ways to enhance this
program in order to improve customer service
through increased value or convenience.
Providing the best customer service also
requires us to understand and respond to
consumer preferences. We have transformed our
merchandising programs and store design to
accommodate our customers’ desire for more
prepared items and specialty foods such as
organic and natural selections. Each Harris
Teeter supermarket is designed and operated for
its particular market area. As such, the degree
of product offerings or number of specialty
departments will be dictated by our customers’
preference in the local market.
Our focus on customer service and ability to
transform our operations to maintain our high
standards of customer service has resulted in
another year of improved operating results at
Harris Teeter. During fiscal 2005, comparable
store sales increased by 3.00% and operating
profit as a percent to sales improved by 23 basis
points to 4.29%. This is the highest profit
margin in Harris Teeter’s history and we will
continue to explore ways to reduce costs and
further improve our operating efficiencies.
The transformation occurring within American
& Efird is more dramatic than that of Harris
Teeter. Apparel production has continued to
migrate to the Asian market and American & Efird
has expanded operations in Asia so that we can
continue to support our valued customers. During
2005 we made additional investments in China
through a joint venture and with an increased
ownership percentage with our existing partners,
and have increased our production capacity to
meet the ever-increasing demand within this
dynamic market. There is a growing demand for
high-quality sewing thread in the Asian market,
and the benefits of our efforts are being evidenced
by increased sales of premium thread. For the
first time in American & Efird’s history we have
more production capacity in China, including our
joint ventures, than in the United States.
Thomas W. Dickson
President and Chief Executive Officer
John B. Woodlief
Vice President – Finance and Chief Financial Officer