NEW STORES, ACQUISITIONS RAISE MARSH 3Q SALES

INDIANAPOLIS -- Marsh Supermarkets here said last week sales and earnings increased for the third quarter and 40 weeks ended Jan. 6.to $3.8 million for the quarter and 3.3% to $9.5 million for the 40 weeks. Same-store sales, excluding fuel, rose 0.7% for the quarter; the company did not release comps for the year to date.Marsh said earnings before interest, taxes, depreciation and amortization rose

INDIANAPOLIS -- Marsh Supermarkets here said last week sales and earnings increased for the third quarter and 40 weeks ended Jan. 6.

to $3.8 million for the quarter and 3.3% to $9.5 million for the 40 weeks. Same-store sales, excluding fuel, rose 0.7% for the quarter; the company did not release comps for the year to date.

Marsh said earnings before interest, taxes, depreciation and amortization rose 13.9% to $9 million, or 4.4% of sales.

In a conference call with analysts last week, Don E. Marsh, chairman and chief executive officer, said supermarket sales were up 8.2% in the quarter, with most of the increase coming from revenues at new stores and five Ross Supermarkets locations acquired in the first quarter.

He also said sales at Village Pantry convenience stores rose 17.1% and sales at Crystal Food Service were up 11.3%, while the loss of two large customers operating 300 stores resulted in a sales drop at Convenience Store Distributing Co., which distributes to more than 1,000 convenience stores.

According to Marsh, sales at Village Pantry were driven by sharp increases in fuel prices, which rose from an average of $1.19 per gallon a year ago to $1.47 during the quarter. Marsh said fuel gallons sold rose 18.5%, with fuel comps up 1.6%, which reversed a trend earlier in the year.

He said the company attributes the increase in fuel sales to a promotion that offers customers of Marsh and LoBill Foods price reductions of 10 to 20 cents per gallon for gas purchased at Village Pantry stores.

Marsh said the nearly flat comps were due to weak comparisons with Y2K sales; increased competition, including 19 competitive openings during the year; and the lower revenue base at CSDC.

He also said colder weather and concerns over higher energy bills also slowed customer traffic during the holiday season.

Marsh said the company has spent $11.9 million of the $12 million authorized for stock repurchases to buy back 41,000 Class A shares and 33,800 Class B shares. The company said it has authorized spending another $3 million for additional repurchase activity.

The company also said it has allocated $70 million for capital expenditures, including two or three new Marsh supermarkets, one of which is scheduled to open this spring and the others to open next fall; the company also said it expects to open an unspecified number of LoBill Foods units, including conversions of existing Marsh stores and possibly some acquisitions, and an unspecified number of Village Pantry locations.