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Spartan Stores Reports First-Quarter Sales Increase

GRAND RAPIDS, Mich. -- Grand Rapids, Mich.-based distributor and retailer Spartan Stores, Inc. on Wednesday said net sales increased 2.3 percent to $502.0 million in its fiscal first quarter ending June 21, 2003, compared with the same period last year.

First-quarter net sales were a 5.6 percent increase from fiscal 2003's fourth-quarter sales of $475.6 million, due in part to a significant improvement in retail comparable-store sales trends and to the shift in the timing of the Easter holiday. The first-quarter year-over-year sales increase was principally due to three new stores opened in fiscal 2003's third quarter, and the shift in the Easter timing.

The company reported a first-quarter operating loss of $348,000, compared with operating earnings of $8.0 million in last year's first quarter.

Retail net sales for the first quarter increased 4.1 percent to $212.3 million from last year's $203.8 million. First-quarter retail comparable-store sales increased 0.7 percent.

Excluding the sales effect of a shift in the Easter holiday, first-quarter comparable-store sales would have declined 1.0 percent, the company said. First-quarter grocery distribution net sales increased 1.0 percent to $289.8 million from last year's $287.0 million.

Spartan completed the sale of its convenience-store distribution operations during the quarter and used the proceeds to further reduce its outstanding debt. The company also closed several underperforming Food Town stores.

"We are pleased with our first-quarter sales results and believe the recent fundamental changes to our grocery distribution and retail operations are working," said Spartan Stores' president and CEO Craig C. Sturken. "We have experienced dramatic improvements in our retail comparable-store sales results in a very brief period, moving from negative high single-digit declines in the previous two quarters to the level attained in fiscal 2004's first quarter. We are also making good progress with the shift in our distribution sales strategy and are continuing to work diligently to maintain this overall sales momentum."

Spartan Stores is the nation's ninth-largest grocery distributor, with warehouse facilities in Grand Rapids and Plymouth, Michigan. The company distributes more than 40,000 private label and national brand products to 330 independent grocery stores in Michigan. Spartan Stores also owns and operates 55 retail supermarkets and 21 deep-discount drug stores in Michigan and Ohio, including Ashcraft's Markets, Family Fare Supermarkets, Glen's Markets, Great Day Food Centers, Prevo's Family Markets, and The Pharm.
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