Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, May 6, 1994 TAG: 9405060098
SECTION: BUSINESS PAGE: A-11 EDITION: METRO
SOURCE: Associated Press
DATELINE: SALISBURY, N.C. LENGTH: Medium
Smith - who was assailed by several of the supermarket chain's shareholders at last year's meeting - was challenged by only two shareholders during this year's meeting. And he all but ignored protestors who greeted the several hundred shareholders who attended the meeting at Catawba College.
``I felt this meeting would be more relaxed, because the shareholders have been able to see what we've been doing,'' Smith said at a news conference after the meeting. ``They've seen our profits and sales come back.
``There was a better comfort level this year.''
It was not as good a time for employees of Food Lion, however, who saw their profit-sharing benefit for 1993 cut from 15 percent of wages to 10 percent by the company's board of directors. Profit-sharing expense for 1993 was $62.2 million, down from $82.2 million in 1992.
Food Lion's 1992 profits were its smallest in nearly two decades. Earning per share in 1993 was 1 cent, compared with 37 cents in 1992.
In 1993, Food Lion was recovering from a highly critical television broadcast in November 1992 on ``PrimeTime Live'' that showed employees allegedly mishandling food. Also last year, Food Lion paid more than $16 million to settle labor and wage charges levied by the U.S. Labor Department. Most of the money went to thousands of Food Lion employees in back wages.
The company is still under fire. It now faces a class-action lawsuit alleging discrimination against black employees. In March, 10 current and former employees from Maryland to Florida joined a black part-time cashier in Athens, Ga., who sued last year alleging that she was passed over for a full-time job in favor of a white woman who had not worked at the store as long.
The Salisbury, N.C.-based company's earning picture has brightened, however. Profits were up in the first quarter of 1994 by $31 million, or 42 percent, over the same three months in 1993.
Abandoning his lectern in favor of a chair, Smith, who did not take his usual bonus in 1993, focused on the future during his 20-minute address to shareholders. He broke no new ground, reiterating the company's plans to renovate 70 existing stores and open only 40 in 1994.
Among the stores being expanded are Food Lion stores at Wildwood Plaza and Valley Commons Shopping Center in Salem and Bennington Plaza in Southeast Roanoke.
Smith would not speculate on whether Food Lion would ever get back to opening 100 stores a year, its expansion pace during much of the 1980s. Some Wall Street analysts have said Food Lion's stock price has been hurt by its slower growth. The stock is hovering below $6 a share, about one-third the level of two years ago.
Smith made no reference to the company's plans to close nearly 88 unprofitable stores in 1994.
Business writer Sandra Brown Kelly contributed to this story.
by CNB