Our Heritage...

It started in 1948 with a small corner market in Brigham City, Utah. There, through sound buying, friendly service, and frugal management, Dee Smith cultivated what has become one of the most competitive, quality-driven grocery retailers in the Western United States.

Smith also sowed the seeds of a simple philosophy that now influences all Smith's Food & Drug Centers' operations, from merchandising to service. Smith's calls it the Golden Rule: Treat customers, employees, and suppliers well. Meet their needs. Earn their respect, and you'll win their loyalty.

With a store for every need, from fine foods to competitive prices, Smith's maintains the lead in attractive Western markets that prize convenience as well as quality.

When it comes to meeting local needs, Smith's delivers-in 156 stores across seven Western states. The company holds the number one grocery market share in Salt Lake City, Las Vegas, and Albuquerque, and the second largest market share in Phoenix-its top markets, and some of the strongest growth regions in the country.

Through its 50 years of operations, Smith's has developed a strong and strategically located store base, excellent name recognition, loyal customers, and a reputation for quality and service.Virtually all Smith's stores combine a full-line supermarket with drug and pharmacy departments and some or all of the following specialty departments: delicatessens, sections providing hot prepared food, in-store bakeries, video rental shops, floral shops, one-hour photo processing labs, full-service bank-ing, and frozen yogurt shops.

Smith's operates three types of stores under different banners. The company's 129 Smith's Food & Drug Centers feature spacious modern layouts, perimeter specialty departments, and centralized checkout facilities. Eighteen Smitty's Marketplace stores, moderately larger than Smith's, offer a much broader range of general merchandise, including home, garden, and domestics in addition to food. Nine PriceRite Grocery Warehouse stores target price-conscious consumers and offer lower prices and fewer product categories and service departments than conventional supermarkets.

A Renewed Commitment to the Basics

In 1997 Smith's renewed its commitment to the basics of its business with initiatives that strengthened the company's Golden Rule: to treat customers, employ-ees and suppliers well.

"After several years of focusing on streamlined oper-ations and reduced costs, we're emphasizing the things that set Smith's apart," says President and CEO Abel Porter. "In the year ahead, we plan to expand and improve our perishables departments to give customers even more of what they tell us they want."

Smith's intensified its focus on customer loyalty in 1997 with a card-based program called Fresh Values. The program rewards customers for shopping at Smith's with in-store savings as well as discounts on travel, local events, and movies. Fresh Values is also the foundation for future market research and targeted promotions.With each Fresh Values purchase, customers provide Smith's with valuable information about when, where, and how they like to shop, and what they like to buy.

Taking customer loyalty to a new level, Smith's is partnering with high-profile manufacturers on targeted direct mail promotions to bring more shoppers into Smith's stores. One of more than 20 such promotions in 1997 targeted pet lovers, a strong and growing market, with attractive in-store discounts on Ralston Purina products. Smith's holiday promotions and birthday program let customers celebrate with savings. Additional campaigns are slated for 1998.

Leading the Trend Toward Convenience

Smith's works to maintain the most modern, efficient, and attractive stores and facilities in its region. In 1997 the company remodeled 29 Smith's Food & Drug stores and built seven new stores in locations that reflect the growth of the market.

By the spring of 1999, Smith's will remodel 18 Smitty's Marketplace stores, greatly expanding Smitty's nonfood offerings and creating a larger community of specialty shops conveniently located under one roof. Fourteen units will be completed by the end of 1998. Home repair shops, wine, garden centers, pet supplies, nutritional products, bath bou-tiques- these are just a few of the new categories Smitty's will offer shoppers.

"Smith's has already learned a lot from Fred Meyer about selecting and managing nonfood categories," Porter says. "In return, we're proud to contribute strong private brands, modern manufacturing and warehouse facilities, industry-leading consumer research and promotions, and an excellent track record in grocery merchandising."

Abel Porter, president and CEO of Smith's Food & Drug Centers, has spent 20 of his 26 years in the food retail industry at Smith's. He started at Smith's as a clerk while still in school. Since then he has served the company in virtual- ly every role: operations, merchandising, even warehouse management and manufacturing- unique additions to his career. Through this exposure, Porter has gained an intimate understanding of the factors behind Smith's success. "Every time in our history we've focused on the customer we've been successful," Porter says. "And you're only going to see that increase, with our renewed concentration on perishables, service, and unique products."