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10/06/2022

Village Super Market's Q4 Snapshot

Wakefern member increases net income by 33%
Marian Zboraj
Digital Editor
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Gourmet Garage NYC
Specialty market Gourmet Garage opened a location in New York City's West Village on April 29.

Family-owned and -operated Village Super Market Inc., a member of the retailer-owned cooperative Wakefern Food Corp., has reported its results of operations for the fourth quarter ended July 30.

Village Super Market operates a chain of 34 supermarkets in New Jersey, New York, Maryland and Pennsylvania under the ShopRite and Fairway banners, and four Gourmet Garage specialty markets in New York City.

The food retailer’s sales were $527.5 million in the fourth quarter, compared with last year’s $536.3 million. The sales decrease was attributed to fiscal 2021 containing 53 weeks, with the additional week included in the fourth quarter. Excluding the impact of the extra week in the prior year, sales rose 5.6% because of a 5.1% increase in same-store sales and the opening of a Gourmet Garage in the West Village in New York City on April 29. Village Super Market experienced increased sales in New York City stores and higher transaction counts. Same-store digital sales also increased 7%.

Gross profit as a percentage of sales slipped slightly to 28.11% in the fourth quarter, compared with 28.31% last year.

The grocers net income was $12.6 million, an increase of 33%, compared with $9.5 million in the fourth quarter of the prior year. Adjusted net income was $12.3 million, a 41% jump, compared with last year’s $8.7 million.

Operating and administrative expense as a percentage of sales dipped to 23.14% in the fourth quarter, compared with last year’s 23.65%, while adjusted operating and administrative expenses decreased to 23.23%.

Village Super Market also released its fiscal 2022 highlights, which included $2.06 billion in sales, compared with $2.03 billion in fiscal 2021. Excluding the impact of the 53rd week in fiscal 2021, sales rose 3.5% due to an increase in same-store sales of 4.1%. Same-store sales improved because of increased sales in New York City stores, higher transaction counts, inflation and continued growth in SNAP benefit redemptions. Same-store digital sales also rose 2%.

Gross profit as a percentage of sales grew to 28.12% in the grocer’s fiscal 2022, compared with last year’s 27.83%, due to increased departmental gross margin percentages (0.57%) and a favorable change in product mix (0.10%), partly offset by higher LIFO charges (0.16%), decreased patronage dividends and rebates received from Wakefern (0.09%) and higher promotional spending (0.14%). Department gross margins increased because of pricing initiatives and improvements in commissary operations.

Net income was $26.8 million, an increase of 34%, compared with $20.0 million in fiscal 2021. Adjusted net income was $35.0 million, an increase of 85% compared with last year’s $18.9 million.

Adjusted operating and administrative expense as a percentage of sales decreased to 24.05% in fiscal 2022, compared with 24.76% in fiscal 2021, due to lower labor costs and fringe benefits (0.61%) and less advertising spending (0.10%), partly offset by increased external fees and transportation costs associated with digital sales (0.08%). Labor costs decreased because of  productivity initiatives, labor shortages and sales leverage, partly offset by minimum wage and demand-driven pay rate increases.

Village Super Market cited a $33.1 million decrease in depreciation and amortization expense, compared with $34.2 million in fiscal 2021 due to the closure of its Silver Spring, Md., ShopRite in February 2021 and the timing of capital expenditures.

Meanwhile, interest income rose to $4.0 million in fiscal 2022, compared with $3.6 million in fiscal 2021 because of higher interest rates and larger amounts invested in variable-rate notes receivable from Wakefern and demand deposits invested at Wakefern.

Keasbey, N.J.-based Wakefern Food Corp. consists of close to 50 members that independently own and operate 360-plus supermarkets under the ShopRite, Price Rite Marketplace, The Fresh Grocer, Dearborn Market, Gourmet Garage and Fairway Market banners in New Jersey, New York, Connecticut, Pennsylvania, Maryland, Delaware, Massachusetts, New Hampshire and Rhode Island. Together with its member companies, Wakefern employs nearly 80,000 people. The company is No. 25 on The PG 100, Progressive Grocer’s 2022 listing of North America’s top food and consumables retailers in North America.

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