Natural Grocers reported higher expenses from pandemic hiring
Net sales increased 20.4% year over year in the fiscal second quarter of 2020 for Natural Grocers by Vitamin Cottage Inc., another indication that the pandemic is helping to shape revenue trends for food retailers.
Those net sales reached $277.5 million in its fiscal second quarter, the food retailer said. The company also reported that daily average comparable-store sales increased 17% year over year for the quarter ended March 31. Net income, meanwhile, reached $9.7 million, a year-over-year increase of 151.8%.
"Our exceptional results for the second quarter were driven by unprecedented sales activity resulting from the COVID-19 outbreak," said Kemper Isely, co-president of Lakewood, Colo.-based Natural Grocers, which operates 157 stores in 20 states. "We are deeply grateful to our amazing good crew members, who worked tirelessly during the quarter to quickly adapt to new circumstances on an almost daily basis. Due to their efforts, our company was able to continue delivering to customers in all our markets the highest-quality natural and organic produce, groceries, and household essentials during a period of unparalleled challenges.”
The fiscal second quarter also brought what Isely called “above-average sales increases in household products, supplements, grocery and bulk. We are one of the few retailers where consumers can still buy bulk products, as we prepackage all bulk at our own bulk processing facility." Consumer buying habits during the early part of the pandemic and stay-at-home mandates also favored Natural Grocers’ private label brands, which he said “performed well. We remain focused on ensuring our supply chain is able to keep up with demand.”
As is the case with other food retailers during this financial reporting period, Natural Grocers reported an increase in store expenses – in this case, a year-over-year increase of 13.4%, to $56.9 million. “The increase in store expenses was primarily driven by the hiring of approximately 650 temporary crew members to support operational demands, and wage increases and bonuses for the company's store crew members, all related to the COVID-19 pandemic,” Natural Grocers said.
During the food retailer’s fiscal second quarter, it also opened two more stores.