Harris Teeter Helps Boost Parent Company’s Q3 Sales

The parent company of Harris Teeter, Ruddick Corp., last week posted an increase of consolidated sales for its fiscal third quarter ended June 27 of 7.2 percent to $1.10 billion, from $1.02 billion in the year-ago period, while for the 39 weeks ended June 27, its consolidated sales grew 6.0 percent to $3.21 billion, from $3.03 billion last year. The company attributed the results to sales increases at both Harris Teeter and Ruddick’s other operating subsidiary, sewing thread and technical textiles American & Efird.

At the supermarket chain, sales grew 5.7 percent to $1.02 billion in the third quarter, compared with $964.2 million in the year-ago period. For the 39 weeks ended June 27, 2010, sales at Harris Teeter rose 5.3 percent to $2.99 billion from $2.84 billion last year. Ruddick said these increases were attributable to incremental new-store sales, partially offset by comparable-store sales declines during the respective periods. Comps dipped 0.68 percent for the third quarter and declined 1.45 percent for the 39-week period, a state of affairs that Ruddick blamed on continuing retail price deflation caused by higher promotional activity and recession-inspired shifts in consumer purchasing habits.

“We continued to drive customer shopping visits and loyalty through the investments we have made in our in-store promotional activity and lower everyday prices,” noted Ruddick president and CEO Thomas W. Dickson. “This has resulted in an increased number of customers, increased number of items sold and greater number of customer shopping visits in fiscal 2010. In addition, our customer loyalty data indicates that the number of active households increased by 1.73percent per comparable store in our fiscal third quarter. Our store-brand penetration also remained strong, at 24.52 percent for the quarter and 24.58 percent for the year. A portion of our investment in pricing has been offset by additional vendor funding, improved operational efficiencies and cost-saving initiatives across all areas of the business.”

During the first three quarters of fiscal 2010, Harris Teeter opened 13 new stores and closed three existing stores, two of which were replaced by new stores. Since the third quarter of fiscal 2009, the chain has opened 17 new stores while closing four stores, for a net addition of 13 stores.

Operating profit at the grocer edged up 0.8 percent to $43.1 million, or 4.23 percent of sales, for the quarter, from $42.8 million, or 4.44 percent of sales, in the year-ago period. For the 39-week period, operating profit grew 0.3 percent to $132.5 million, or 4.43 percent of sales, from $132.1 million, or 4.65 percent of sales, last year. While operating profit was affected by new store pre-opening costs, it still managed to increase, mainly because of higher sales and an ongoing focus on operational efficiencies and cost controls, the company said.

Bolstered by its strong operating performance and financial position, Harris Teeter plans to complete a major remodeling and expansion on one store during the fourth quarter of fiscal 2010. The grocer’s growth strategy includes the continued expansion of its existing markets, including the Washington, D.C., metro market area. During fiscal 2011, Harris Teeter intends to open nine new stores, one of them a replacement location, and complete major remodels on five stores. The company said it decided to open fewer new stores in fiscal 2011 in light of the still-tenuous economic situation.

Harris Teeter operates 199 stores in eight states mainly in the southeastern and mid-Atlantic United States, including the District of Columbia.