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KANSAS CITY, Kansas -- Associated Wholesale Grocers (AWG) here posted $4.9 billion in sales for the year ending Dec. 31, 2005, giving the grocery cooperative record sales and patronage for the period.
The increase bettered the previous year by $344 million, comprising a 7.5 total jump in revenue.
"Our year-end patronage is the highest in the history of our company," said Bob Hufford, AWG's chairman. Pointing to AWG's distribution of record rebates during the year, Hufford said. "The percentage paid to qualifying purchases of 2.49 percent beats the old high mark of 2.48 percent set in 1994."
Record sales and patronage are not new to AWG, according to Gary Phillips, AWG's president and c.e.o., citing AWG's record increase of $1.8 billion in sales or 57 percent in the past three years.
"To give you an idea of what that growth means, if we had started a brand new company just three years ago, and all of the new business we've enjoyed went there, that $1.8 billion company would be the fourth largest grocery cooperative in the U.S.," said Phillips.
AWG also reported that reduced its selling, general and administrative expenses more than 50 basis points during the past three years, a reduction that has helped the organization save "$20 million this year, allowing us to increase our year-end patronage and reduce our gross margins to drive sales," said Mike Rand, e.v.p. of wholesale operations.
According to Jerry Garland, e.v.p. marketing and merchandising, said, AWG is "constantly working on ways to drive expenses down, to re-invest those dollars into sales building programs, which drives our sales increases. As sales increase, expenses go down and we start the cycle all over again."
In other news, the AWG board had authorized the construction of a new 800,000-square-foot replacement warehouse to be built in Oklahoma City. The new facility will replace older facilities that were previously acquired from Homeland Stores in 1995 and Fleming in 2003. In addition, the board authorized a reduction in freight charges for deliveries to member stores and a 20 percent reduction in fuel surcharges.
As the second largest grocery cooperative in the country, AWG services more than 1,500 stores in 21 states.