Roundy’s Comp Sales Down, Seeks to Drive Traffic

MILWAUKEE — Roundy’s [4] here has asked its merchandising team to work on developing in-store surprises — “non-advertised specials that offer great values to customers and enable us to make some extra money,” Bob Mariano, chairman and chief executive officer, said here during the company’s first financial conference call since going public.

Speaking to analysts to discuss financial results for the fiscal year that ended Dec. 31, Mariano said Roundy’s plans to continue to invest in everyday pricing and refine its promotional plans “to be more traffic-driven to attract the kind of customers we want coming through our doors.”

Asked how Roundy’s might react if gas prices rise past $5 a gallon, Mariano said, “We will try to help customers who are pinched for cash spread their money by being an exciting merchant and offering great values, which may mean we need to go to suppliers whose production may be down and make deals that enable us to get a better price so we can all make money.”

Net income for the 13-week fourth quarter was up 6.6% to $9.2 million, with sales up 2.2% to $968.7 million and same-store sales down 1.2%. The company said customer transactions were down 3.2% during the quarter and average transaction size was up 2%. 

Mariano said the shift of New Year’s Day into the first quarter of 2012, compared with the fourth quarter a year ago, cost Roundy’s between 25 and 35 basis points, while the loss by the Green Bay Packers before the Super Bowl cost the company another 60 to 70 basis points compared with 2011, when the chain enjoyed three shopping weekends on the Packers’ way to the Super Bowl.

Warmer weather this year than last also affected same-store sales during the quarter, he added.

For the year, net income increased 4% to $48.1 million, while sales rose 2% to $3.8 billion and same-store sales fell 0.2%.  Customer transactions fell 2.6% and average transaction size rose 2.5%, the company said.

Roundy’s said it anticipates sales growth in 2012 of 2.5% to 3.5% and same-store sales growth between negative 1% and flat. 

Capital spending will amount to $65 million to $70 million — for four new Mariano’s Fresh Markets in Chicago, two replacement stores in Wisconsin and an unspecified number of remodels — compared with cap-ex last year of $66.5 million.

Mariano said Roundy’s is “pleased with the overall performance” of its five Mariano’s Fresh Markets, including one that opened during the first quarter.