Harris Teeter's Parent Posts Strong Fiscal 2010

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Harris Teeter's Parent Posts Strong Fiscal 2010


Ruddick Corp., the parent company of grocery chain Harris Teeter, reported that consolidated sales for the 53 weeks of fiscal 2010 grew 7.9 percent to $4.40 billion, from $4.08 billion in fiscal 2009. Consolidated sales for the 14-week fiscal fourth quarter ended Oct. 3, 2010, rose 13.5 percent to $1.19 billion, from $1.05 billion in the year-ago period. The Charlotte, N.C.-based company attributed the consolidated-sales increases for the year and quarter to improved sales at both Harris Teeter and American & Efird (A&E), Ruddick’s sewing thread and technical textiles subsidiary, as well as an additional week of operations in fiscal 2010.

Harris Teeter’s sales for fiscal 2010 increased 7.1 percent to $4.10 billion, vs. $3.83 billion in fiscal 2009. Fourth-quarter sales in fiscal 2010 were $1.11 billion, a rise of 12.5 percent from the $984.5 million posted in the year-ago period. These sales increases were due to sales from incremental new stores and the extra week of operations in fiscal 2010, according to Ruddick, noting that the additional week in fiscal 2010 accounted for about 2.0 percent and 7.8 percent, respectively, of the total sales increase for the fiscal year and fourth quarter. The sales boosts were partially offset by comparable-store sales dips of 1.10 percent for the year and 0.14 percent for the fourth quarter, however.

During fiscal 2010, Harris Teeter opened 13 new stores, two of which replaced existing stores, and closed three locations, for a net addition of 10 stores. The grocer operated 199 stores at the end of fiscal 2010. Retail square footage grew 6.4 percent in fiscal 2010, compared with an 8.7 percent increase of last year.

Harris Teeter’s fiscal 2010 operating profit went up 3.4 percent to $181.6 million (4.43 percent of sales), from $175.6 million (4.59 percent of sales) in fiscal 2009, while fourth-quarter operating profit grew 12.9 percent to $49.1 million (4.43 percent of sales), from $43.5 million (4.41 percent of sales) in the prior-year period. Ruddick said that this increased operating profit resulted mainly from the grocer’s higher sales and the ongoing implementation of operational efficiencies and cost controls. Savings from such initiatives have gone to fund increased promotional activity and offset higher occupancy costs, pension expenses, and increased debit and credit card fees.

“Harris Teeter’s fiscal 2010 operating profit of $181.6 million is the highest operating profit in our history,” noted Thomas W. Dickson, Ruddick’s chairman, president and CEO. “This accomplishment was realized during a period of heightened competitive activity and economic uncertainty that has led to unprecedented low levels of consumer confidence. During fiscal 2010, we drove customer shopping visits and loyalty through investments in our lower everyday prices and promotional activity. As a result, our customer loyalty data indicates that the number of active households increased by 1.29 percent per comparable store in fiscal 2010, and the total number of customer transactions and number of items sold also increased. A portion of our investment in pricing has been offset by greater vendor funding support, improved operational efficiencies, and cost-saving initiatives across all areas of the business.”

Because of its strong operating performance and financial position, Harris Teeter is able to continue its store development program for new and replacement stores, along with the remodeling and expansion of existing stores. During fiscal 2011, the grocer plans to open eight new stores (one of which will be a replacement store) and perform major renovations on another eight locations. Although planned new store openings are down from last year, due to the still-sluggish economy, Harris Teeter has upped planned capital investments in its existing store base as part of its renovation and expansion plans.

These plans entail the continued expansion of existing markets, among them the Washington, D.C., metro area encompassing northern Virginia, the District of Columbia, southern Maryland and coastal Delaware. Fiscal 2011 consolidated cap ex for Harris Teeter are projected to total about $165 million.

Matthews, N.C.-based Harris Teeter is a regional supermarket chain with stores in eight Southeastern and Mid-Atlantic states, and the District of Columbia.