URM Stores Inc., the big Spokane-based grocery distributor, posted record revenue of about $721 million in its fiscal year ended July 31, up about 5.5 percent from the previous year, and is continuing to grow, says President and CEO Dean Sonnenberg.


Ranked by Washington CEO magazine as the ninth largest privately held enterprise in the state, URM now employs about 3,000 people, and that number is continuing to climb as well, he says.


Business has been pretty good, says Sonnenberg, a longtime URM employee who moved into the cooperatives top executive post last December, succeeding Greg Tarr, who retired.


URM, owned by a group of independent grocers who buy much of their inventory from the cooperative, doesnt disclose its earnings, but Sonnenberg says they grew at a slower rate than its revenues in the latest fiscal year, due partly to a couple of nonrecurring expenses.


He also says that URM, operating in a highly competitive industry known for slow growth and razor-thin margins, doesnt expect revenue growth in its 2005 fiscal year to equal that of the recently completed 12-month period.


Nevertheless, Sonnenberg says, We have had a lot of things happen in the last year, and its been a lot of fun.


A lot of URMs member-owners have been remodeling their stores, and some are making plans to open new stores, he says. Weve got a lot on the drawing board I cant talk about yet and a significant number of remodels, he adds.


Meanwhile, URM has installed a new voice-activated order system in its 600,000-square-foot distribution center at 7511 N. Freya that will improve the operations efficiency and reduce errors by order selectors, Sonnenberg says.


The new interactive system uses a male or female voice to guide employees, wearing headsets and carrying small wireless computers on their hips, as they pick cases in URMs sprawling warehouse to fill orders, he says. The system confirms when theyve chosen orders correctly, alerts them if they make mistakes, and tells them how much time they have to complete a given task, he says.


Installed last spring, the system already has reduced errors from one in every 1,100 cases of merchandise picked to one in 3,500, he says, adding that he thinks a further reduction to one error for every 5,000 cases picked is achievable. Workers select about 85,000 cases a day from the North Side warehouse. Through improved efficiencies, URM expects to recoup its capital investment in the new system within 18 months, he says. URM currently spends $170,000 a year just on pick labels that are placed on ordered cases, but Sonnenberg says he expects the new system eventually will make those labels obsolete.


He says he attributes URMs sizable revenue increase in its latest fiscal year mostly to internal growth within its current stockholders stores, noting that 75 percent of those stores had sales increases .


URMs stockholders together operate about 150 stores, spread across Eastern Washington, North Idaho, Western Montana, and northeast Oregon. The company owns the Rosauers supermarket chain, and its members also operate stores under the Yokes, Super 1 Foods, Family Foods, Harvest Foods, and other banners.


URM also, though, is continuing to build up sales to non-member customers, including about 1,000 hotels, restaurants, and schools and about 200 convenience stores, Sonnenberg says.


The company, which was founded here in 1921 by a group of Spokane-area grocers as United Retail Merchants, does more than sell groceries and general merchandise. It also offers its members an array of planning, design, financial, marketing, insurance, technology, and real estate services.


Sonnenberg has been with URM almost 30 years, having joined the company immediately after finishing studies at Eastern Washington University. His father operated grocery stores in the Columbia Basin for many years and was a customer of URM, and Sonnenberg worked at grocery stores while attending EWU, he says. He notes also that his brother, Clyde, owns Sonnenbergs Market & Deli Inc. here.


Sonnenberg says he became intrigued at an early age with how a grocery cooperative operates, and adds that once he decided to pursue a career in that field, I banged on the doors here at URM until they hired me. They turned me down the first three times.


He says he started out as a field sales representative and worked his way up the ladder, serving as senior vice president of retail services, sales, and procurement before being named to succeed Tarr.


While pleased with the companys recent growth, Sonnenberg says, Im not really interested in how big we can be. Im more interested in seeing how profitable we can be.


Also, he says, rapid change in the grocery industry and escalating competition, particularly as the giant Wal-Mart chain looks to expand its market share in the companys service area, keeps him from feeling too self-content.


Things just change way quicker than they used to, and you cant get complacent, he says. What were going to be like 10 years from now, I dont know, but were going to be here, selling groceries.