Our Heritage...

As the oldest grocery store chain west of the Mississippi, Ralphs tradition of quality dates back to 1873, when George Ralphs opened his first store at the edge of downtown Los Angeles. Since that time, the company has kept pace with its dynamic market, opening modern, attractive stores throughout Southern California.

Along the way Ralphs has earned a reputation for innovation. Ralphs was one of the first grocers to buy entire farm-fresh crops, open a chain of supermarkets, build stores with parking lots, install an electronic billing system, and introduce private brands and generic products. Each new idea has helped to make quality, service, and savings the Ralphs signature, so well recognized today.

With stores from Santa Barbara to San Diego, Ralphs holds the number one grocery market share in a high-growth region known for its demanding, food-conscious consumers.

Ralphs' 264 supermarkets lead the largest food retail market in the United States: Southern California. Conveniently located stores, well-stocked with some 30,000 items, make shopping easy and rewarding for busy customers who recognize the Ralphs name as the hallmark of quality.

Ralphs' regional market is diverse as well as growing. To meet the needs of price-conscious consumers, the company also operates 80 Food 4 Less warehouse stores, introduced in 1988. These larger stores serve price-conscious Southern California shoppers in all demographic groups.

Food 4 Less distinguishes itself from other warehouse stores by offering Ralphs' quality at prices substantially below its competitors'. Food 4 Less is Southern California's undisputed low-price leader and earns the fourth largest market share.

"Our goal is to match the diversity of the market we serve," says George Golleher, president and CEO. "With Ralphs and Food 4 Less, we reach neighborhoods and communities outside the scope of competitors who cater to one segment of the mar-ket.

We're also well positioned to retain business as neighborhoods evolve over time."

Raising the Bar on Quality

In 1997 Ralphs built and remodeled 50 stores in its new Signature format, bringing the total to 77 at year-end. Besides a new look, Signature stores offer new levels of service for the quality-hungry, time-pressured consumer who appreciates value and convenience. Ralphs will continue to advance its Signature strategy in 1998, opening 15 new stores and remodeling 43 existing stores.

Each Signature store is a mini-marketplace, offering the freshest produce, the finest restaurant-quality seafood, and a full selection of meats, including beef raised and processed locally, according to Ralphs' own rigorous specifications. Dairy and deli cases are stocked with many items from the company's two award-winning creamery plants. A newly revamped bakery line addresses local shopping trends with a full selection of European-style gourmet breads and other baked goods. And new Forget-Me-Not floral islands, unique to Ralphs Signature stores, offer selection and quality to rival elegant floral shops.

"Ralphs makes a point of offering customers Œthe best' of everything. So when we saw others in our market imitating our approach, we decided to raise the bar on quality," says Golleher. "With our Signature stores and service, we keep Ralphs a cut above the competition and maintain our lead at the highest end of the market."

Winning Strategies

Ralphs is a long-time leader in the category of ready-to-eat food, offering quality home meal replacement products prepared in the Ralphs com-missary; full-service delis with the ambiance of European bistros; and a Chef-on-the-Run food bar featuring fast, self-serve cold entrees and salads. In 1997 Ralphs refined its ready-to-eat strategy by developing three different market concepts that tar-get customers by demographics. Products vary in price and selection across Ralphs locations.

Also fueling growth is Ralphs' Club, a card-based loyalty program. Since its introduction in October 1997, total card circulation has increased to approx-imately nine million, and the program now accounts for more than 70 percent of sales. In addi-tion to building loyalty, Ralphs' Club provides the technological platform for new levels of market research, enabling the company to track trends and target customer needs ahead of competitors.

New Ideas and New Operations

As Ralphs rolls out Signature stores and service across Southern California, several new stores will begin to benefit from Fred Meyer's nonfood expertise. These stores are being designed to incorporate up to 20 new categories of merchandise, including garden supplies, hardware, small appliances, and electronics.

In addition, Ralphs has assumed operations for 56 Hughes Family Markets, acquired in 1997 by QFC. Initially the stores will continue to operate under the Hughes names, converting to the Ralphs banner over time. "Hughes stores bring us a loyal customer base and new locations that will enable us to serve Southern California even more efficiently and competitively," says Golleher. "Our goal is to integrate these stores into the Ralphs family carefully, preserving customer relationships while introducing shoppers to Ralphs' selection and service. We're confident they'll appreciate the difference."

George Golleher, president and CEO of Ralphs, is a 27-year veteran of the Southern California supermarket industry. For the past 14 years, he has worked for Food 4 Less, holding leadership posts in operations and finance, gaining significant expertise in the integration and consolidation occurring throughout the industry. "California is a challenging place to do business, which makes us particularly proud of Ralphs' success and growth," Golleher says. "With the innovations now underway in our stores, we think Ralphs is set to remain the finest grocery chain in our market."