Fedco Article Overlooked Customers, Growth
One of the problems with the conventional analysis of retailing is that it tends to follow the same ruts in the road, and fails to identify new roads when it encounters them.
This is one reason why we take issue with some of the conclusions found in “Fedco Is Getting a Make-Over, but Analysts Say It’s Not Enough” [July 4].
Fedco is not a publicly traded company, and we do not routinely share information about our business with equity analysts as a consequence. This may be why the analysts quoted in the article are not familiar with the progress our company has made.
To cite a few facts overlooked in this article:
Fedco’s chainwide sales per square foot average more than $700, double and triple the sales rate of most of the competitors identified in the article. Our top store, Pasadena, produces sales per net square foot of more than $1,000.
Fedco’s members do include a cadre of older individuals who have been with us for many years, and an equal number of young Californians whose demographics are very much those of Southern California as a whole. In other words, we are attracting young, affluent new customers--an average of 12,000 new ones a month so far this year.
Our customers are intensely loyal, and our programs are working. Our same-store sales rose 36% over the four-day Memorial Day weekend, for example.
Fedco’s experienced new management is totally renovating every aspect of the business, and yes, these are early days in that effort. But those people who really understand the business and what it means to them, our members and our top vendors, have voted to support our company. Our favorable new agreements with Fleming Cos., Bergen Brunswig, 3M, Cendant, Citibank and Bank of America, to name just a few--agreements your article did not mention--tell a completely different story.
This management knows that Fedco needs repair, and a vigorous program of improvement is underway. I regret that The Times’ coverage of Fedco failed to report on this systematic, vigorous and effective turnaround program.
Finally, the article quoted Jane Warner as saying she had to be careful because “it’s so crowded in there. If you’re not careful, people will knock you down.” What Ms. Warner also said--and we know because we were there when she was interviewed--is that she is a longtime loyal shopper of Fedco because the prices are great, the selection is huge and there’s never a reason to go anywhere else. Too bad that kind of positive comment didn’t make it into the copy. It would tell a different--and more accurate--story.
ROBERT J. STEVENISH
President and
Chief Executive
Fedco
Santa Fe Springs
