Last updated on March 25th, 2016 at 02:16 pm
Associated Wholesale Grocers Inc. (AWG), headquartered in Kansas City, Kansas, reported record consolidated net sales of $8.94 billion and distributed $194 million in year-end patronage at its annual shareholders meeting March 20.
AWG’s year-end patronage rebate represented 2.79 percent of qualifying sales, an increase of two basis points over the prior year and the second highest dollars and percentage in the company’s history.
Total distribution returned to shareholders, including interest, allowances and patronage, was $544 million. Total members’ investment and equity ended the year valued at $477.7 million, up $28 million (6.4 percent) from the prior year and an all-time record.
Gross profit within the cooperative, including cash discounts from suppliers, was 5.71 percent, an increase of two basis points over the prior year due to improvements in supply chain controls. Operating (SG&A) expenses were virtually flat vs. the prior year at 3.1 percent. Trading value for class “A” shares increased 4 percent to $1,915 per share.
“While other grocery wholesalers have consistently raised fees and charges to their customers over the years to make up for increasing expenses or declining sales, AWG has bucked the trend by dramatically reducing operating expenses year after year, and lowered its effective markup and fees charged to its members while maintaining dependable year-end patronage returns,” said AWG President and CEO David Smith. “This is our model and it has worked well for 90 years.”
AWG Chairman of the Board Barry Queen said of the results, “While the general economic climate and competitive situation in 2015 was not good overall for our industry, AWG continues to deliver strong results for its independent grocer membership. This is a testament to our cooperative model, which leverages the collective strength of over 3,000 stores.”
That message was summarized as the theme of AWG’s Annual Shareholders Meeting: “Strong Results—Stronger Together.”
Queen added, “AWG is blessed to have the right combination of skilled management, dedicated employees, great suppliers and owner-members with passion and energy. All together, we have the strength to differentiate ourselves in a positive way from competing chains and big-box stores.”
AWG presents new leadership team
Smith recognized the members of the recently formed AWG Leadership Team during the shareholders meeting. Smith, who succeeded Jerry Garland at the end of 2015, shared his enthusiasm and confidence in the team’s passion for being truly retailer-focused.
“This leadership team draws on a wealth of diverse backgrounds, experiences and talents. They are aligned in leading our employees to serve the needs of our membership and meet the challenges ahead,” Smith said.
The leadership team includes:
- Jeff Pedersen, EVP, division operations
- Dan Funk, EVP, merchandising and marketing
- Scott Welman, SVP, general counsel
- Gary Koch, EVP, CFO
- Patrick Reeves, SVP, chief HRO
- Richard Kearns, EVP, distribution and logistics
Queen said, “I want to say how honored I am to be associated with David Smith, our wonderful CEO, our management team and the dedicated associates of AWG. I often say, ‘When running a business, you are only as good as those you surround yourself with,’ and I believe David has done a superior job of just that.”
Established in 1926, AWG is a retailer-owned grocery cooperative with annual sales of nearly $9 billion. AWG’s full-line distribution centers are located in Kansas City; Springfield, Missouri; Oklahoma City, Oklahoma; Southaven, Mississippi; Goodlettsville, Tennessee; Fort Worth, Texas; and Pearl River, Louisiana. Its VMC operations are located in Fort Scott, Kansas, and Memphis, Tennessee. AWG has approximately 600 member-owners and services more than 3,400 retail outlets in 31 states.
