Food 4 Less Sales Dip Blamed on Weak Economy, L.A. Riots

Food 4 Less Supermarkets Inc. said Wednesday that the slow economy and lingering effects of last year’s Los Angeles riots caused its latest three-month sales to fall by 7%.

For its second fiscal quarter, which ended Jan. 9, the privately held grocery-store chain had sales of $845.3 million, compared to $905.1 million for the same period a year earlier. Food 4 Less said it reduced the number of its stores by six during the last year, leaving it with 251 locations. The company closed a handful of “underperforming” stores acquired in its 1991 purchase of Alpha Beta supermarkets, President George Golleher said in a prepared statement.

Food 4 Less recently reopened one of the four stores that were severely damaged or destroyed during the Los Angeles riots. The former Boys store in Watts reopened as a Food 4 Less warehouse store. The Watts reopening “marked the completion of the initial rebuilding program after the riots and was one of our most successful grand openings,” Golleher said.

With the Watts location open, Food 4 Less now operates 20 warehouse stores, up from just 10 a year earlier. The company has opened about half of the 13 warehouse stores planned for 1993 and will build 10 more during fiscal 1994, spokeswoman Linda McLoughlin Figel said.

Second-quarter operating cash flow rose by 27.5% to $28.5 million from $19.8 million a year earlier. The increase came “despite continued pressure on sales from the lingering recession in Southern California and uncertainty on the part of the consumer,” Golleher said.

The supermarket operator anticipates “a trend of increased operating cash flow in the third and fourth quarters as we continue to put the effects of last spring’s riots behind us and get back to business,” Golleher said.

Food 4 Less has generated “greater cost savings and efficiency benefits” during the past year by integrating its Food 4 Less and Alpha Beta operations, Golleher said. The company also has benefited by increased volume at its lower-cost Food 4 Less warehouse stores.

In the Los Angeles area, Food 4 Less operates stores under the Alpha Beta, Food 4 Less, Boys and Viva names. It also operates Cala, Bell and QFI stores in Northern California and Falley’s supermarkets in the Midwest.