2020 Annual Report.Pdf
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Barry Queen, Chairman David Ball Jim Brown John Clarke Victor Cosentino Kim Eskew Four B Corp. Doc’s Food Stores, Inc. County Fair, Inc. Cosentino Enterprises, Inc. Harp's Food Stores, Inc. Queen Enterprises, L.L.C. Kansas City, KS Bixby, OK Mitchell, SD Prairie Village, KS Springdale, AR Paola, KS Don Woods, Jr., Vice-Chairman Alan Larsen Jay Lawrence Alan McKeever James Neumann Dave Nicholas Woods Super Market, Inc. Houchens Food Group, Inc. MAL Enterprises, Inc. McKeever Enterprises, Inc. Valu Discount, Inc. Nicholas Supermarkets, Inc. Bolivar, MO Bowling Green, KY Sweetwater, TX Independence, MO Mt. Washington, KY Tipton, MO Pat Raybould Jeff Reasor Donny Rouse Randy Stepherson Erick Taylor Dale Trahan James Zyrowski B & R Stores, Inc. Reasor’s, L.L.C. Rouse’s Enterprises, L.L.C. Stepherson, Incorporated RPCS, Inc. Dale L. Trahan Ben's Supercenter, Inc. Lincoln, NE Tahlequah, OK Thibodaux, LA Memphis, TN Rogersville, MO Enterprises, Inc. Brown City, MI Rayne, LA March 23, 2021 Dear Shareholders, Your Board of Directors and management are pleased to present the audited results for fiscal 2020. Consolidated company sales reached $10.6 billion, up 13.3% on a comparable basis. After retainage, total year-end patronage was $254.4 million, up $40.59 million, another record, or 2.79% of qualifying sales. Total distribution, including patronage, allowances, and interest back to members, was $615 million, an increase of 11.4%. Also, the trading value of AWG stock increased to $3,600 per share, an increase of $1,200 or 50%, thus allocating over $31.5 million in equity to existing shareholders. After this increase, the Board declared a 3-for-1 stock split, which provides two shares of “B” common stock for every “A” and “B” share currently held. The trading value is now $1,200 per share, reducing the investment required for new members to $18,000. Net sales for the cooperative were $9.2 billion, up 8.24% from the prior year. Member equity increased to $538.1 million, an all- time high. Beyond financial results, we can say that OVERCOMING OBSTACLES became the theme for AWG and our member-retailers in 2020. We all pivoted quickly to meet COVID-19 driven needs. Achieving the ideal was elusive as unprecedented consumer de- mand overwhelmed inventories, supply, personnel, and the time required to get the job done. By OVERCOMING OBSTACLES, we collectively achieved more than ever before, redefined our potential, and received appreciation for our role as America’s critical infrastructure. We are incredibly proud of our member companies, teammates, and all those that helped us as we helped others. While keeping our teammates safe and maintaining supply to our members were top priorities, we also made significant progress on our strategic initiatives of Value Proposition, Health, Technology, and AWG Brands. These focus areas included a record investment by AWG, an increase of $40 million over 2019 into promotional allowances and discounts on numerous center store and fresh products. AWG member stores outperformed other grocers with comparable year-over-year retail sales (reported by Nielsen), increasing 16.6% for the full year, 540 basis points or 48% more than all other grocery channels. For weeks 11 through 52, growth accelerated to 21.5% for AWG members, 820 basis points or 62% more than other grocery channels. We also received record-setting scores in AWG’s Member Satisfaction Survey, with significant improvements in all categories. Our continuing mission is “to provide our member-retailers all the tools, products, and services they need to compete favorably in all markets served, all at the lowest possible cost.” We will accomplish this by effectively executing our four core strategies: accel- erate profitable member growth; attract, develop and retain top talent; strengthen core services and support; and leverage tech- nology and organizational assets for sustainable member success. Be on the lookout for breaking news and updates throughout 2021 as we continue to make progress on these initiatives for you. We are very thankful for our teammates’ contributions, our Board’s leadership, and our members’ and our vendor partners’ support. You have our commitment to continuous improvements and OVERCOMING OBSTACLES for you. Sincerely, Barry Queen David Smith Chairman of the Board President & CEO Associated Wholesale Grocers - Retailer Owned. Retailer Led. Retailer Focused. Member OVERCOMING OBSTACLES retail sales increased an COVID-19 AWG’s vision for 2020 turned out in again the next day. AWG achieved • Regular communication to entirely different for our mem- record-setting numbers in the ware- the member-retailers to help incredible ber-retailers due to the impact houses. Many of the warehouses improve shelf conditions of COVID-19. Most retailers in our had 100% increases in daily sales The support teams also assisted trade areas were budgeting for a in the early days of the pandemic. member-retailers with providing a flat to 2.5% increase in sales, but Through ongoing communication, clean and safe shopping environ- 21.5% ended up with double-digit in- great collaboration with our mem- ment. Advertising, marketing, décor creases in many cases. ber-retailers, and hard work in the source group, store engineering, and facilities, AWG was able to support the field teams quickly assembled Weeks 11-52 of In early February, AWG assembled our stores and continued operating and shared information to our mem- 2020 vs 2019 a COVID-19 task force to enable all of our ten distribution centers. ber-retailers on Plexiglas shields, us to continue to ship groceries to COVID-19 decals and signage, sanita- our member-retailers and minimize As vendors began allocations, the tion stations, and other items related the impact of the pandemic on our teams put processes in place to help to the pandemic. AWG and VMC teammates and their our member-retailers “Get Right at communities. The team was victori- the Shelf.” Vendors were discontin- As we continue into 2021 and be- ous as every AWG and VMC facility uing items and the stores needed to yond, it will be essential to build has remained open throughout the adjust facings to give more holding upon the lessons learned in 2020: COVID-19 pandemic. power to the items in stock. Great the importance of strong commu- work from the buying teams included: nication, great collaboration, and Division teams prepared for the relationships built on trust. AWG massive spike in sales and alloca- • Sharing information to the division’s teams daily and VMC will continue to assist tions from the vendors, and worked our member-retailers with prod- closely with our member-retailers • Working closely with vendors uct, price, promotion, people, and to establish maximum order quan- to understand supply issues and allocations place to help compete in today’s ev- tities. All of this enabled employees er-changing environment. to accomplish their work within a • Communicating updates on reasonable shift and return to dive StoreFront 100%of AWG & VMC facilities remained open during COVID-19 02 Associated Wholesale Grocers, Inc. 2020 Annual Report 03 Member OVERCOMING OBSTACLES retail sales increased an COVID-19 AWG’s vision for 2020 turned out in again the next day. AWG achieved • Regular communication to entirely different for our mem- record-setting numbers in the ware- the member-retailers to help incredible ber-retailers due to the impact houses. Many of the warehouses improve shelf conditions of COVID-19. Most retailers in our had 100% increases in daily sales The support teams also assisted trade areas were budgeting for a in the early days of the pandemic. member-retailers with providing a flat to 2.5% increase in sales, but Through ongoing communication, clean and safe shopping environ- 21.5% ended up with double-digit in- great collaboration with our mem- ment. Advertising, marketing, décor creases in many cases. ber-retailers, and hard work in the source group, store engineering, and facilities, AWG was able to support the field teams quickly assembled Weeks 11-52 of In early February, AWG assembled our stores and continued operating and shared information to our mem- 2020 vs 2019 a COVID-19 task force to enable all of our ten distribution centers. ber-retailers on Plexiglas shields, us to continue to ship groceries to COVID-19 decals and signage, sanita- our member-retailers and minimize As vendors began allocations, the tion stations, and other items related the impact of the pandemic on our teams put processes in place to help to the pandemic. AWG and VMC teammates and their our member-retailers “Get Right at communities. The team was victori- the Shelf.” Vendors were discontin- As we continue into 2021 and be- ous as every AWG and VMC facility uing items and the stores needed to yond, it will be essential to build has remained open throughout the adjust facings to give more holding upon the lessons learned in 2020: COVID-19 pandemic. power to the items in stock. Great the importance of strong commu- work from the buying teams included: nication, great collaboration, and Division teams prepared for the relationships built on trust. AWG massive spike in sales and alloca- • Sharing information to the division’s teams daily and VMC will continue to assist tions from the vendors, and worked our member-retailers with prod- closely with our member-retailers • Working closely with vendors uct, price, promotion, people, and to establish maximum order quan- to understand supply issues and allocations place to help compete in today’s ev- tities. All of this enabled employees er-changing environment. to accomplish their work within a • Communicating updates on reasonable shift and return to dive StoreFront 100%of AWG & VMC facilities remained open during COVID-19 02 Associated Wholesale Grocers, Inc.