SPRINGFIELD, N.J. — Village Super Market here said Tuesday that price investments held down profit growth in the fiscal third quarter, despite sales gains.
The company, which operates 20 ShopRites in New Jersey, Maryland and Pennsylvania, said net income was down 29% for the period, to $4.6 million, while sales grew 3.7%, to $359.8 million, compared with year-ago results. Same-store sales were also up 3.7%.
Gross profit fell 40 basis points to 27% of sales, which the company attributed primarily to “investments in lower prices to combat nontraditional competitors,” partially offset by improved product mix, lower promotional spending and lower inventory charges.
Read more: Sales Rise, Earnings Flat at Village
Operating and administrative costs also increased in the period, which the company attributed to higher payroll costs and other factors. The company added its first “Village Food Garden” at its Livingston, N.J., location, and also added online ordering via the ShopRite from Home service at at several locations. The company also had higher costs for health, pension and worker’s compensation.
For the nine-month, year-to-date span, net income excluding one-time gains and charges was down 16% vs. a year ago, while sales gained 4.5%, to $1.1 billion, including a 3.2% increase in same-store sales.
Village reported “reduced losses” at its two Maryland stores, but said they are still underperforming vs. expectations.
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