Regional grocer Weis Markets is pressing forward with a $101 million capital expenditure program this year as it looks to restore top line growth at its Northeast operations.
The operator of 166 stores, 122 of which are located in Pennsylvania, confirmed a previously disclosed capital expenditure budget of $101 million would be used to fund 16 projects. Those projects consist of two new stores under construction in Selinsgrove and Enola, Pa., 13 remodels and expansion of a 1.1 million-sq.-ft. distribution center in Milton, Pa.
“Since 2008, we have invested more than $500 million in our growth and improvement programs. During this period, we completed more than a hundred projects,” Weis Markets president and CEO Jonathan Weis told attendees at the company’s shareholders’ meeting. Speaking to the distribution center expansion and supply chain initiatives, Weis noted, “As a company that self-distributes, our supply chain is a vitally important area for us. Over the last year, we have increased our focus on maximizing efficiency by driving millions of dollars of cost out of the system, while maintaining our high standards for store service. This has helped us reduce store level inventories and improve freshness.”
Weis was elevated to the role of CEO earlier this year after serving in an interim capacity since last September when former CEO David Hepfinger left the company.
The investments follow what proved to be a challenging year for the publicly held company majority owned by the Weis family. Despite opening four new stores last year in Woodlawn and Towson, Md., Hillsborough N.J. and Huntingdon Valley, Pa., the company’s sales declined 1.1% during the fourth quarter ended December 28, 2013 to $686 million and same store sales declined 3.5%. For the year, sales were essentially flat at roughly $2.7 billion and same store sales declined 2.6%.
The company’s top line challenges were attributed to a host of factors including cuts to the food stamp program, the shortened holiday season, fuel price deflation and deli sales impacted by manufacturer recalls. The top line difficulties caused fourth quarter profits to decline 29% to $15.7 million with full year profits, negatively affected by a $6.1 million charge related to former CEO Hepfinger’s separation agreement, dropping 13.1% to $71.7 million.