ASHEVILLE, N.C. — Inflation in food and fuel drove a 4% increase in sales at Ingles Markets during the second quarter, the company said Friday.
Net income increased 38% to $7.7 million on $870.4 million in sales for the period, which ended March 26. Officials attributed “significant” product price inflation as compared to the same period last year for the sales increase and noted that higher gas prices also contributed by increasing the number of transactions and the average transaction size during the quarter.
“In the near term we expect inflation to exert a strong influence on certain product costs, customer behavior and the competitive landscape,” Ron Freeman, Ingles’ chief financial officer, said in a conference call discussing quarterly results. Freeman said sales excluding gasoline increased by 2.4% and comparable store sales without gas increased 1.9%.
Freeman described inflation as a “precarious situation” at Ingles, forcing the company to be cautious when passing along price increases and keeping an eye on competitor activity and on its own promotions. “The one thing you absolutely cannot do is just automatically pass every cost increase on every product. That’s not good for customers and we don’t believe our competitors are doing that,” Freeman said. “You really have to watch it each week on the buy side and the sell side.”