Harris Teeter Parent Sees Higher Q1 Sales, Despite Higher Promotion Costs

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Harris Teeter Parent Sees Higher Q1 Sales, Despite Higher Promotion Costs

Harris Teeter parent company Ruddick Corp. last week posted consolidated sales for the first quarter of fiscal 2010 ended Dec. 27, 2009 of $1.04 billion, a 4.6 percent increase from the $995 million reported last year. The rise was attributable in part to a 4.7 percent sales increase at the company’s supermarket subsidiary to $972.3 million, vs. $928.9 million in the year-ago period.

This sales growth was because of incremental new store sales that were partially offset by a comparable-store sales decrease of 2.37 percent for the quarter, according to Ruddick, adding that comps for the quarter were adversely affected by retail price deflation and changes in consumer buying habits during the recession.

Operating profit at the grocery chain in the first quarter fell to $42.3 million, or 4.35 percent of sales, from $44.3 million, or 4.77 percent of sales, in year-ago period. Ruddick attributed the decline primarily to continued investments in retail price promotions, although the rise in sales and an ongoing emphasis on operational efficiencies and cost controls have partially offset the extra promotional costs.

“We continue to deliver quality, variety and value to each and every customer through further investing in our in-store promotional activity and lower everyday prices,” noted Ruddick chairman, president and CEO Thomas W. Dickson. “Despite the presence of deflation in some categories, we realized a greater number of items sold and increased customer shopping visits in our comparable stores during the first quarter of fiscal 2010. Additionally, our customer loyalty data indicates that the number of active households increased by 2.21 percent per comparable store. …. Our customers are much more price sensitive than ever before; however, they continue to demand the quality, variety and service we have always provided and we will continue to provide.”

Because of its strong operating performance and financial position, Harris Teeter is planning open seven new stores (one a replacement location) and complete major remodels on two stores during the remainder of fiscal 2010. Cap ex plans call for the continued expansion of such existing markets as the Washington, D.C. metro area.

According to Ruddick, which said it “remains cautious in its expectations for the remainder of fiscal 2010” in the current economic climate, “Harris Teeter will continue to refine its merchandising strategies to respond to the changing shopping demands and to maintain or increase its customer base.”

A subsidiary of Charlotte, N.C.-based Ruddick Corp., Harris Teeter, Inc. operates supermarkets in eight Southeastern and mid-Atlantic states and the District of Columbia.