Ralphs Trims 1st-Quarter Loss to $32 Million

Citing lingering consolidation costs related to its merger and to recent acquisitions, Ralphs Grocery Co. on Tuesday said that it had a first-quarter loss of $32 million, an improvement over losses of $283 million in the previous quarter.

Ralphs said it had transition costs of $7.6 million after acquiring nine Smith’s Food & Drug Center stores and a Smith’s distribution center and creamery in Riverside last year.

The Compton-based company became the largest supermarket operator in Southern California after its 1995 merger with the operator of Alpha Beta, Boys, Viva and Food 4 Less chains. The Food 4 Less warehouse chain has been retained but the other stores have been converted to Ralphs.

During the quarter, which ended April 21, the company converted nine existing stores to Ralphs or Food 4 Less. The company said it also had costs connected with the conversion of eight of the nine Smith’s stores.

The shift of operations from four old warehouse facilities to the larger distribution center formerly owned by Smith’s temporarily affected some product delivery and impeded sales, Ralphs executives said. Same-store sales, revenue for stores open at least 12 months, declined 0.2%, compared with a decline of 1.9% during the fourth quarter.

“The acquisition of the Riverside distribution center and Smith’s stores has resulted in some delay and modification of the original integration plan,” said George Golleher, Ralphs’ chief executive. “However, we believe the transaction will ultimately result in increased operating efficiencies, cost offsets and reduced capital expenditures.”

The company operates 270 Ralphs and 76 Food 4 Less stores in Southern California. Ralphs also operates 63 stores under three different chain names in Northern California and the Midwest.