Sixty years ago, when Lorenzo J. Smith opened a small grocery store in Brigham City, Chinese takeout food was practically unheard of.

Videotapes wouldn't be invented for almost a half-century. Cash registers still didn't need electricity.And with financial institutions collapsing left and right, a bank would have probably been the last thing he would have wanted inside his store.

So, what would Lorenzo think today as he walked into a 90,000-square-foot store that bears his surname? What would he say as he went up and down more than two dozen aisles of groceries? As he watched live lobsters bouncing about in aquariums in the meat department? Or as he observed a customer cash his paycheck at the in-store bank, drop off a couple of shirts at the in-store dry-cleaners, grab some moo goo gai pan from the in-store Chinese food takeout and pick up a dozen roses at the in-store floral shop? It's anyone's guess how the original Mr. Smith would react to these drastic changes in grocery-store services. But company officials do think he would be proud about how the company has grown. And grown. And grown.

In fact, Smith's Food and Drug Centers Inc. grew so rapidly during the 1980s that it went public in 1989.

"The company needed more capital to expand," said Robert D. Bolinder, chief financial officer, who was formerly the chief administrative and financial officer for the Boise-based Albertson's Inc. "I was hired when the company went public."

Basically, Smith's needed an expert in financing because of an ambitious plan to penetrate the potentially lucrative but risky Southern California supermarket market.

Not satisfied with 95 stores in Utah, Wyoming, Idaho, Nevada, Arizona, New Mexico and Texas, the corporation plans to open eight stores this year in Ventura County, Calif. It's not a token entry into the market, either.

There are 15 more stores planned for Southern California in 1992. And another 15 to 18 in 1993.

"We plan to open 60 stores in the next four years (in California)," Bolinder said.

Risky? Yes, but Smith's officials believe the risk will work in their favor.

"Because Southern California has been so tough, there have been no new entries in that market for years," Bolinder said. And existing stores there haven't been expanding to keep up with the growth, he added.

Smith's is also betting on its track record in seven other states, where net sales have grown from $1.4 billion in 1988 to $2 billion last year. Net income nearly doubled, from $18 million in 1988 to $34 million in 1990.

Bolinder also said the "better way to run a supermarket" philosophy will prove to be popular among Californians.

Each of the new stores will be 70,000 to 90,000 square feet and will stress the "one-stop shopping" concept. "There's no store like ours down there."

Stockbrokers are taking notice and giving Smith's good odds.

"Based on its performance so far in its Arizona markets, we see no reason why the company will not be equally successful in Southern California," states a Feb. 25, 1991, report by the Chicago-based William Blair and Co.

A Goldman, Sachs and Co. investment research report predicts Smith's Southern California venture will lose $5 million in 1991 and $3 million in 1992 but will then earn $12 million to $17 million a year by the mid-1990s.

Though California will profit from most of the new Smith's construction, Utah will reap long-term economic benefits because the company's corporate offices, main distribution center and production facilities are in Utah, Bolinder said.

For example, Smith's brand yogurt, cultured in Layton, will be sold to thousands of Smith's customers in California.

"It's a real boon to Salt Lake and the state to have a corporation like Smith's based here," Bolinder said.

The corporation, which has a decentralized, regional management doesn't plan to ignore its existing stores.

"Our philosophy is to remodel each store every five to eight years and expand then as needed." Bolinder said the Utah markets have been tapped, although an average of one store will be built a year to keep up with growth.

"We're not going to just fill in to force out competitors. It makes more sense to invest in California now."



Presence in the west

Although Smith's was founded in Utah, the chain's 95 stores can be found throughout the West.

Utah 34

Arizona 18

Nevada 15

New Mexico 14

Idaho 5

Wyoming 5

Texas 4

The majority of stores are concentrated along the Wasatch Front, and in Las Vegas, Phoenix and Albuquerque.