Albuquerque Journal from Albuquerque, New Mexico on March 31, 1985 · Page 102
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Albuquerque Journal from Albuquerque, New Mexico · Page 102

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Albuquerque, New Mexico
Issue Date:
Sunday, March 31, 1985
Page:
Page 102
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ALBUQUERQUE JOURNAL 15 un Jay, Starch Hlo Gf Profit Pushes Proliferation of Warehouse Clubs Small-Retailer, Private-Citizen Response Has Analysts Forecasting Sales of $20 Billion by 1990s By Cotton Timberlake AP BUSINESS WRITER Warehouse clubs, stores where both wholesale and retail customers can shop as members, are appearing in cities all across the country. And they are generating so-much interest that the industry is expected to grow dramatically with one estimate forecasting a quintupling of annual sales to $20 billion by the early 1990s. "It's one of the most exciting concepts to come along in many years that is truly different," said Ronald Loveless, senior vice president of the Sam's Wholesale Club division of Wal-Mart Stores Inc. of Bentonville, Ark. Joseph Ellis, a retail analyst with the investment firm Gold-man Sachs & Co. in New York., said: "We see the warehouse club industry as being in only the early-to-middle stages of its development, with enormous potential ahead for its major participants." More than 64 warehouse clubs already have opened and 111 are expected to be in operation by the end of this year, Ellis said in a recent report. The clubs some cities have more than one are not easy to describe. "We describe these things as a wholesale-retail, cash-and-carry, membership-only warehouse," Loveless said. The clubs typically are housed m a warehouse-type building of 100,000 square feet or so, with a concrete floor and racks on which the merchandise is displayed. Shoppers, both businesses at the wholesale level and group members at the retail, present identification to gain entry. Inside, shoppers use extra-large or flatbed carts. Only cash and checks are accepted and there is no delivery. Wholesale members operators of restaurants, motels, hotels, service stations, vending machine and offices of all types pay an annual membership fee of around $25. These customers, who do their personal shopping at the clubs, too, represent about 50 percent to 60 percent of the business. Group members, who are employed by government agencies, public utilities, banks and savings and loans, pay a 5 percent surcharge on the merchandise they buy. At some clubs, they also pay an annual membership fee of around $15. The clubs, which generally do not advertise, sell brand merchandise that has a high turnover. Offering fewer items than do traditional retailers, they sell food, liquor, sundries, appliances, housewares, apparel and other soft goods, and hard goods like batteries and tires. "Although on the front end that doesn't sound particularly appealing to the shopper, when they look over the merchandise assortment, they get excited about that," Loveless said. Sol Price, co-founder of Price Co., the industry pioneer, asked: "Would you believe it if I told you the Price Club was the third most talked about attraction in San Diego next to the zoo and Sea World? "Why is it exciting to so many people? I'm not sure I want to tell," Price said. "I'm sure price has an awful lot to do with it. I think price alone wouldn't do it. It's got something. And I'm not sure whether it was planned. But it's there." Price Co. was founded by Price and his son, Robert, in 1976 in Southern California as a wholesale-only business. But it did not generate enough sales, so the Prices decided to open up to group members a few months later. "We knew there was a need for something like this, but we didn't dream we'd turn up the volumes we turned up," Sol Price said. The 11 Price warehouses in operation throughout fiscal 1984 averaged an estimated $92 million in sales each, Ellis says. At least five Price Clubs will exceed $100 million in volume in 1985, he estimates. Price Clubs operate with a gross margin of 10 percent and generate a pretax profit margin of 4 percent, the analyst says. "Price Club's enormous success has spawned myriad 'clones' that are systematically staking out markets all over the country in an effort to be the first in each area to establish this exciting new wholesale-retail concept," he said. Loveless, at Wal-Mart, said, "Our chairman, Sam Walton, is always studying other forms of retailing and naturally was interested in the concept based on the figures Price was producing." The industry's key players include Costco Wholesale Club of Seattle; Pace Membership Warehouse of Aurora, Colo.; Wholesale Club of Indianapolis; Warehouse Club of Niles, 111.; B.J.'s Wholesale Club, a unit of Zayre Corp. of Framingham, Mass.; and Seattle-based Pay 'N Save Corp.' Price-Savers. "The warehouse club business may be expected to grow at a dramatic pace, perhaps reaching $10 billion in volume as early as 1987 or 1988 and $20 billion by the early 1990s," Ellis said. r i i i J212 san Mateo n.l ki-wm 24 WE BUY & SELL U.S. COINS - KRUGERRANDS PANDAS -MAPLE LEAFS -1-10-100 0z. SILVER BARS COIN JEWELRY - GOLD CHAINS OLYMPIC GOLD & SILVER COINS "LIBERTAD" MEXICAN COINS 1 Oz. SILVER BIRTHDAY BARS ALBUQUERQUE COINS i E 1 Laramie Square 3212 San Mateo HE. 881-4865 24 Hr. Quotes I UKi Unocal Refuses To Delay Animal Meeting THE ASSOCIATED PRESS LOS ANGELES Unocal Corp. said Friday it would not postpone its annual meeting, rejecting a request for a delay by a group led by oilman T. Boone Pickens Jr. Meantime, Pickens' group, Mesa Partners II of Amarillo, Texas, announced it had filed preliminary materials with the Securities and Exchange Commission in Washington for a proxy fight on the issue. The actions came two days after Mesa Partners purchased a bloc of 6.7 million Unocal shares, increasing its stake in the international oil company to 13.6 percent, and one day after the group said it wanted to delay the shareholders meeting while it considered launching a bid to take control of Unocal or force a restructuring of the company. Unocal was the most active issue for a third straight day on the New York Stock Exchange, rising 87 Vj cents to close at S50.37V2 a share. Pickens is the chairman of Mesa Petroleum Co. Unocal is parent of the Union Oil Co. of California. Mesa Partners already has spent $1.05 billion to buy Unocal stock and it has said it is taking with lenders about arranging additional financing for possible further purchases. In a two-paragraph statement, Unocal turned down the Pickens proposal to postpone Unocal's annual meeting from April 29 to June 28. Pickens' group said it wanted a delay to give shareholders and directors time to consider any plan it might come up with and to put together its own candidates for the Unocal board. "Unocal does not intend to inconvenience its shareholders just because T. Boone Pickens wants a delay," Hartley said, noting that Unocal's proxy statements for the annual meeting were mailed to shareholders on March 18 and that some already are being re- DeVore Aviation Plans To Market 'Affordable' Plane The "Affordable Airplane" program has been launched by DeVore Aviation Corp. with the completion of initial financing. DeVore is located at 6104 Kir-cher Blvd. NE, Albuquerque. It is developing the Sundancer, a a tricycle-gear, pusher airplane. The first prototype flight should occur next spring, President Gilbert DeVore said. The plane is expected to sell for less than $20,000, about half the price of similar trainingpersonal airplanes on the market, he said.. After a yearlong name-the-plane contest, William Newton of New Hampshire won with the name Sundancer. To raise an additional $500,000 for static and flight testing and certification completion, DeVore said partnership interests will be sold through Sept. 30. DeVore Aviation is 31 years old. turned. The Pickens proposals are an expected agenda item at Monday's Unocal board meeting. The materials submitted by Mesa Partners to the SEC include proposals that, if adopted by shareholders, would force Unocal's annual meeting to be adjourned until June 28. Get A Calculator That Has No Equal. Get A Hewlett-Packard. HP41CV Reg. $225.00 EWLETT PACKARD HP41CX Reg. $325.00 SALE $275.00 SALE $189.95 Advanced Programmable Handheld Computers as v.; Free Offer - Reg. $525.00-SALE $449.00 Buy an HP-41C or HP-71B before April 30, 1985 and receive a free copy of the Users' Library Software Catalog. HP-71B Basic Language Handheld Computer List Sale List Sale HP-11C Adv. Program-Scientific 75.00 67.50 HP-82401A HP-IL Interface 125.00 112.50 HP-12C Adv. Program-Financial 120.00 99.95 HP-82420A 4K Memory Module 75.00 67.50 HP-15C Adv. Program-Scientific 120.00 99.95 HP-82490AHP-41 Translator Pac 125.00 112.50 HP-16C Computer Scientist 120.00 99.95 HP-82120A Battery Pac (HP-41) 35.00 31.50 HP-82104A Card Reader 195 00 165.00 HP-82059D Charger (HP-41 ) 20.00 18.00 HP-82143A Thermal Printerplotter 385 00 325.00 HP-82200A Touchpad (HP-41) 20.00 18.00 HP-82162A HP-IL Thermal Printer 450.00 385.00 HP-41 Hard Case (HP-41 only) 25 95 22.95 HP-82161A Digital Cassette Drive 550 00 470.00 HP-41 Hard Case (HP-41Cdr) 29 95 26.95 HP-82160A HP-IL Interface 125 00 112.50 HP-82180A Ext. Funct. Module 75.00 67.50 HP-82153A Optical Wand 125.00 112.50 HP-82181A Ext. Memory 75.00 67.50 HP-9114A Portable Disc Drive 795 00 715.00 HP-2225B ThinkJet Printer 495.00 445.00 SALE ENDS 43085 Quality products for the World of Science, E HOURS MON-FRI. 8 00-5 30 SAT 8 30-4 30 ngineering & Business. , r.. .r,,- .- M Quantities Limited 401 WYOMING NE-ALBUQUERQUE, N 265-7981 M. B71S3 VISA MASTER CHARGE AMERICAN EXPRESS If your you 1 id tain; to us aoora a ion No tax on your interest It's called The Tax-Deferred Annuity, a single premium instrument which allows you to defer all taxes on earned interest until you withdraw funds, while earning a competitive yield. Annuities up to $1,000,000 AmeriWest Insurance Services, a wholly-owned subsidiary of Albuquerque Federal, now offers The Tax-Deferred Annuity. The annuity is underwritten by Pacific Fidelity Life Insurance Company, and is available at any of Albuquerque Federal's 14 offices throughout New Mexico. The Tax-Deferred Annuity allows you to invest a one-time-only single premium of $2,000 up to $1,000,000 in a plan that earns you substantial interest (currently, it's 10.5). One of the reasons an annuity is excellent for long-term earnings is that the interest is not taxed until you withdraw it In some ways this is similar to an IRA, but the big difference is liquidity, i v. rvrrri m v'w .. 'sn You may withdraw your money from an annuity with no penalty if you do it under certain conditions. We can explain the restrictions. The Advantages of The Tax-Deferred Annuity are: Taxes deferred on all interest earned First year interest of 10.5 Lower limit bailout provision Guaranteed safety Access to your funds No probate delays A number of options for payout, including checksforas long as you live After much study, we think the Pacific Fidelity annuity is the one which best suits the needs of our customers. If your aim is to defer taxes with a sophisticated savings program, wouldn't it be a wise move to call or drop by one of our offices for a full explanation? PC f W i v 7A Mbiicpieircpi Ibderal ZA Member FSLIC " Offings Statewide With Assets nfMnrp Than Sl.5 Billion. Albuquerque Rio Rancho Santa Fe Las Cruces Farmington Single-premium deferred annuity Policy Form No. GA-6-383. Underwritten by Pacific Fidelity Life Insurance Company. Home Office. Pasadena. California: Administrative Office, Cedar Rapids, Iowa. Effective annual rate not less than 5.5 during first five policy years, and 4.5 thereafter. Withdrawal charges may be Incurred for early withdrawal.

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