The Company is simplifying its organization by more clearly defining accountabilities and establishing consistent, simple and efficient processes. Internal resources have been dedicated to assessing and, where appropriate, redesigning processes as well as developing a short list of key performance indicators focused on customers and store operations.

2006 Progress

• Continued efforts to restructure the supply chain, which proved to be more complex and costly than originally anticipated. By year end, the supply chain stabilized and delivered improved service levels
• Planned and developed organizational transition, focused on redesigned processes and a leaner administrative structure
• Established key performance indicators beginning with the work of the Positive Action Groups, described under Grow

2007 Expectations

• Continue remaining phases of national supply chain restructuring, while delivering consistent and improved service and in-stock availability to our customers
• Approve and implement organizational transition and put redesigned processes into practice
• Enhance four distinctive formats – Superstore, Great Food, Hard Discount and Wholesale – to meet the needs of diverse markets across the country