(from www.sec.gov)
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Giant Food Inc. |
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From the April 28, 1997 Washington Post
| '96 (in $ 000s) | % Change From '95 | |
| Revenue | 3,880,959 | 0.5 |
| Net Income | 85,504 | (16.3) |
Description:
Giant Food is the dominant grocery chain in the Washington area, taking in about 45 cents of every dollar spent in supermarkets in the region. The company operates 171 food/drug stores regionally and three free-standing drugstores. The chain also operates six supermarkets in New Jersey under the Super G name, along with two in Delaware and one in Pennsylvania.
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The year following the death of longtime company chairman Israel Cohen proved a challenging one for Giant. The chain had its first major strike in 20 years when a five-week walkout by Teamster truck drivers forced Giant to lay off 2,000 warehouse workers and stock its stores through a network of temporary suppliers.
Though Giant was able to keep its stores fully stocked at first, the strike began to take its toll when it lasted longer than either the company or the striking workers had anticipated. The chain's sales fell $75 million during the strike, compared with the year-earlier period, and when it ended, the company began an aggressive promotional campaign to win back shoppers.
Despite the problems caused by the labor dispute, Giant won flexibility from its unions to use outside suppliers for some of its new stores in its northern region, which it argued is critical to its ability to compete. Two years ago Giant began to expand north of the Washington/Baltimore area, and last year it announced it would speed up its already aggressive schedule of store openings in those new markets, opening about 40 grocery stores in New Jersey, Delaware and Pennsylvania over the next decade. Four of those will open by the end of the year, bringing its total for the three states to 11.
Though Giant repeatedly has expressed concern about the market being close to saturation— creating the need to expand northward—it plans to open four stores in the Washington area this year, one in Montgomery County and three in Prince George's County. The company has said it must work hard to preserve its market share in the area as competitors, such as Shoppers Food Warehouse and Fresh Fields, expand here too.
Also last year, Giant was sued by a group of African American employees in its warehouses for race discrimination—a charge the company denies and said it plans to fight in court. Shortly after the suit was filed, the company promoted Stephen W. Neal, an African American manager, to a newly created position as vice president for community development. He also would be responsible for the chain's minority relations in and out of the company.
Giant's acclaimed Visa card program, which gives 3 percent rebates to shoppers at Giant stores, had problems last year when the New York bank that issued the card backed out of its contract with Giant, saying too many shoppers were paying off their entire balances each month. Giant negotiated a similar deal with Chevy Chase Bank to issue a Giant Visa card and has sued the New York bank for breach of contract and damages.
