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SALT LAKE CITY (AP) -- Independent grocers and supermarkets face tough competition from such big-box retailers as Wal-Mart and Costco that also sell food staples, an industry executive said.
"We are under attack," Richard P. Parkinson, chief executive officer and president of Salt Lake-based Associated Food Stores Inc., told stockholders on Friday. The annual meeting offered plenty of war analogies, including a video comparing the Japanese attack on Pearl Harbor to the big-box march on small retailers.
Associated Food Stores is a cooperatively owned wholesale distributor for nearly 600 independently owned supermarkets across eight Western states.
"There are organizations that have targeted the markets that we serve with a saturation policy -- that's the only way to describe it," Parkinson said. "And it's not going to go away. It's going to be part of our life in the future."
Efficiencies in Associated Foods' warehouse and transportation system gives its members some advantages over the large retailers, and the smaller guys can more quickly adapt to changes, he said.
"For so many years, independent grocers in the Intermountain West just had to show up for work," Parkinson said. "But never before have we seen the competitive influences we see today. We can no longer just show up. We have to do things differently and be better in those areas where they cannot compete with us."
Associated Foods hopes to pick up business left by the bankrupt Fleming Cos. Inc., which shut down its grocery wholesale division in Salt Lake City.
Parkinson said Associated Foods' new distribution facility in Farr West, Utah, has boosted company efficiency, lessened accident rates and helped ensure distribution accuracy and on-time delivery.
Associated Foods was founded in 1940 by Donald P. Lloyd, who was president of the Utah Retail Grocers Association, to give members buying power.
The co-op employs more than 1,400 people who help move 750 truckloads of groceries each week.
(Copyright 2003 by The Associated Press. All Rights Reserved.)
