Harris Teeter 2006 Annual Report Download - page 8

Ruddick Corporation & Subsidiaries Annual Report 2006 5
Harris Teeter: Committed to Customer Service and Quality
We are committed to providing our customers the best variety and selection, the highest quality and
outstanding customer service at competitive prices. This commitment is key to our success, both in the past as
well as the future.
Our prior success has translated into future growth. In a year when we have accelerated our new store opening
plans, we have also achieved record sales and operating profit. Both sales and operating profit increased from fiscal
2005 to fiscal 2006. Fiscal 2006 sales increased to $2.92 billion, an increase of 10.5%, while operating profit
increased 12.4% to $127.6 million. We also realized a record operating profit margin of 4.37% in fiscal 2006.
These results, along with our continued strong comparable store sales increases of 3.20% in fiscal 2006, 3.00%
in fiscal 2005 and 2.97% in fiscal 2004, provide the stimulus for our accelerated growth.
During this past year we successfully opened sixteen new stores, including the six stores acquired from Winn-
Dixie in 2005. The six acquired stores were completely remodeled prior to their opening to ensure they meet
the high standards of a Harris Teeter supermarket. We plan to continue our accelerated new store openings next
year with the expected opening of twenty-two supermarkets. Two of the new stores to be opened in fiscal 2007
will replace existing stores. During fiscal 2007 we also plan to increase the number of stores being remodeled.
Our current plan calls for completing remodels on eleven supermarkets during fiscal 2007, up from the six
remodels we completed during fiscal 2006. Six of the 2007 remodel projects will result in larger Harris Teeter
supermarkets to better serve our customers.
At Harris Teeter, our knowledgeable staff is just the beginning of excellent customer service. We develop
store designs and product offerings based on the demographics of the surrounding neighborhoods. Our
prototypes begin with the Harris Teeter neighborhood store which is a 40,000-square-foot supermarket
with a full selection of dry grocery, perishable and prepared food items. Next is our flagship store, which at
48,000 square feet, has expanded departments throughout for even greater variety as well as a fully staffed
pharmacy. The top of the line is our superflagship which is a 55,000- to 70,000-square-foot store that adds
further amenities such as in-store chefs, hot food bars, pizza and pasta stations, housewares and more.
Customer service and product selection sets us apart from our competitors. We strive to offer the most
complete assortment of products and services to accommodate our customers’ lifestyles. Our private-label brands
and specialty programs are designed to complement the wide variety of national brand products we offer, and
give our customers options when choosing their specialty products. Our customers today desire more organic and
specialty foods, and we have responded by expanding our Harris Teeter Naturals® product line, which is exclusive
to Harris Teeter. In addition, we continually refine and build upon our other specialty programs, including:
Harris Teeter Fishermans Market,™ which offers fresh seafood items through our weekly Fresh Catch program;