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New Stores, Comps Lift Harris Teeter's Q1

CHARLOTTE, N.C. -- First-quarter sales at Harris Teeter here rose 12.6 percent to $896.6 million, thanks to new store activity, partially offset by store closings and divestitures, and a comparable store sales increase of 4.40 percent, the grocer's parent company Ruddick Corp. said yesterday.

“Our commitment to superior customer service and our company-wide execution of focused promotional programs enabled us to continue to grow our market share and our customer base,” Thomas W. Dickson, chairman of the board, president, and c.e.o. of Ruddick Corp.

Harris Teeter’s operating profit increased 24.8 percent to $44.2 million (at 4.93 percent of sales) in the quarter. Ruddick Corp. said the retailer’s sales increases, along with a continued emphasis on operational efficiencies and cost controls, have provided the leverage to offset the incremental costs associated with its new store program (pre-opening costs and incremental start-up costs) and increased associate benefit costs, credit, and debit card fees and other occupancy costs.

Total capital expenditures for the quarter were $40.9 million. During the first quarter, Harris Teeter opened two new stores and completed the remodeling and expansion of one store. Since the end of the first quarter of fiscal 2007, Harris Teeter has opened 16 new stores while closing or divesting five stores for a net addition of 11 stores.

The grocer plans to open an additional 13 new stores (two of which will replace existing stores) and complete the major remodeling on six more stores (three of which will be expanded in size) during the remainder of fiscal 2008. The new store development program for fiscal 2008 is expected to result in a 9.0 percent increase in retail square footage as compared to an 11.9 percent increase in fiscal 2007.

Harris Teeter’s capital expenditures are presently planned to be approximately $202 million for fiscal 2008 and calls for the continued expansion of its existing markets, including the Washington, D.C. metro market area, which incorporates northern Virginia, the District of Columbia, southern Maryland, and coastal Delaware.

The company’s management said it remains cautious in its expectations for the remainder of fiscal 2008 due to the intensely competitive retail grocery market and challenging textile and apparel environment (Ruddick also operates American & Efird, Inc., one of the world’s largest global manufacturers and distributors of industrial sewing thread, embroidery thread and technical textiles.)

Harris Teeter has operations in eight Southeastern states.
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