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The Honolulu Advertiser
Posted on: Tuesday, June 17, 2003

Shelves low on Best Yet brand

By Andrew Gomes
Advertiser Staff Writer

Ron Shima, president of Shima's Market in Waimanalo, says he orders about five pallets of goods twice a week from Fleming. However, he adds that he's getting about half of what he needs, which is starting to worry him.

Gregory Yamamoto • The Honolulu Advertiser

Selections of frozen vegetables, jelly and pancake syrup have been thinning at some local supermarkets recently as supply problems of Fleming Cos. Inc., the state's largest grocery wholesaler, have led to spotty inventory for the company's low-cost brand of foods and other items.

The shortages are not widespread, and are limited to relatively few items of Fleming's Best Yet brand, including frozen waffles, vegetable oil, salad dressing and frozen pie shells.

But the supply difficulties, stemming from the bankruptcy of Fleming, which filed Chapter 11 in April and has since lost Target Corp. as a grocery customer, have raised concerns among some Fleming customers who are turning to other suppliers for items Fleming can't deliver.

"Our stores have some (inventory) holes," said Roger Godfrey, president of Times Super Market, which now brings in one container a week from grocery distributor Supervalu Inc. to supplement Fleming orders Godfrey expects will improve in the next week or so.

"They're making good progress," he said. "Unfortunately, we've got a few glitches right now."

Along with Times, Fleming supplies Foodland Super Market Ltd., military commissaries, 7-Eleven Hawai'i, Longs Drugs stores and Daiei, representing an estimated distribution of 25 percent or more of packaged grocery items sold in the state.

Other large retail chains — including Safeway, Star Markets Ltd., Costco, Wal-Mart, Sam's Club, KTA Superstores on the Big Island and Big Save on Kaua'i — either supply themselves or primarily use other distributors and are not affected by Fleming's supply strain.

A Fleming spokesman did not respond to a request for comment on Hawai'i supply issues yesterday.

Fleming, based in Lewisville, Texas, issued a statement Friday saying it will focus on restoring grocery wholesale service levels to "historic standards," and noted it negotiated about $200 million of vendor credit expected to help operations.

"The company will continue to work with its vendors to make additional progress in terms of restoring trade support," Fleming stated. "Substantial progress has been achieved with vendors that is enhancing, and should continue to improve, Fleming's ability to increase customer service levels."

Fleming also said it is exploring the possible sale of its grocery wholesale business, and will concentrate on profitable units while closing selected facilities.

Local supermarket executives said they believe Fleming's Hawai'i division is profitable and will see improved service in the next week or so.

Still, others are concerned about potentially prolonged delivery problems. "The out-of-stock list is getting longer and longer," said Ron Shima, president of Shima's Market in Waimanalo. "I am kind of getting worried."

Shima, who orders about five pallets of goods from Fleming twice a week, said he can get only roughly half of what he needs. "It's pretty bad," he said. "I just gotta sit tight. Hopefully it doesn't get worse."

Most of the items in short supply at Shima's were Fleming's Best Yet brand of goods that range from aluminum foil to mayonnaise to frozen foods.

Best Yet peanuts, charcoal, instant oatmeal and several other items were nearly out at the Ala Moana Center Foodland yesterday, though in all cases other brands were available.

Foodland spokeswoman Sheryl Toda would not comment on the supply of Fleming goods, though in April she said the state's largest supermarket chain had set up alternative supply sources in the event that problems arose.

Still, at the Beretania Street Foodland, pasta and frozen vegetables were running low, while Best Yet items including vegetable oil, garbanzo beans and something called "Cheeseburger Dinner" in a box were out of stock.

Other supermarkets supplied by Fleming said disruptions have been minor. "They're not jamming me up," said Ken Okimoto, manager of Waianae Store and Nanakuli Super, which rely on Fleming for less than 10 percent of store items and have been using local wholesaler Shimaya Shoten Ltd. to pick up the slack.

Clifford Tamura, who runs Tamura Superette in Wai'anae, said he orders most items directly from manufacturers but relies on Fleming for frozen foods and products by General Foods and Procter & Gamble.

"I'm all right," he said. "The main staples (such as rice and toilet paper) — no problem. It's not like a shipping strike."

Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.