Fred Meyer: super-center seller.

• Author: Pratt, Fred
• Position: Fred Meyer Inc.

Facing fierce competition and controversy, Fred Meyer works to keep its Alaska retail niche.

Fred Meyer Inc. believes its huge one-stop shopping stores are a natural for Alaska, and two decades of steady growth here prove it. "You only get cold once," points out Rob Boley, Fred Meyer assistant vice president for public relations.

The Fred Meyer strategy of aggressive pricing and broad product lines isn't leaving the company out in the cold. While fighting off pushy national chain competitors throughout its region, Fred Meyer continues to expand and upgrade its Alaskan marketing position.

Based in Portland, Ore., Fred Meyer has 131 stores and 25,000 employees in seven Western states. (The Alaska operation includes 10 stores and 1,600 employees.) Of the nationwide stores, 87 of them combine food and department stores like the west Fairbanks center that opened in October 1991. It was the company's first move here into what the retail industry calls "super-centers," but what Fred Meyer executives prefer to call "unique one-stop shopping stores."

The company came to Alaska with a department store on Northern Lights Boulevard in Anchorage in 1975. A similar store mixing clothes, hardware and general retail goods opened four years later in Fairbanks on College Road.

Fred Meyer continued expanding into southeast Alaska and the Kenai Peninsula, sometimes with its own major stores and sometimes with specialty shops like jewelry stores as tenants in other malls.

Interior Expansion

A retail "contrarian," the chain's entry into interior Alaska came when the economy in Fairbanks was contracting with the completion of the trans-Alaska oil pipeline. Fred Meyer grew in a very price-conscious market, and its second and much larger Fairbanks store opened when the Interior was still recovering from a recession that had gripped Railbelt communities for almost five years.

The company went through its own big changes in December 1981 when its management bought it out. Fred Meyer later became a corporation traded on the New York Stock Exchange. The initial leveraged buy-out was put together by Kohlberg Kravis Roberts & Co., which remains a major shareholder through an affiliate, FMI Associates.

With revenues near $3 billion a year, Fred Meyer posts steady growth in cash flow and assets. The company carries about a half billion dollars in long-term debt.

One-Stop Shopping

Fred Meyer began life as a food store in the 1920s. Food now makes up slightly more than...