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Spartan to Continue Investments

GRAND RAPIDS, Mich. — Spartan Stores here said Wednesday it plans to continue to make strategic promotional and capital investments to drive higher sales to counter the slow pace of economic recovery while also focusing on improving profitability.

Dennis Eidson, president and chief executive officer, said the company is continuing to invest in initiatives "that are helping us to best deliver value and convenience to customers."

"While the cost of these investments has had an impact on retail margins, our second-quarter retail market share and volume results reflect the consumers' acceptance of these initiatives, as well as the growing momentum of our Yes Rewards loyalty program," he said in a statement announcing second-quarter results.

Read more: Kroger Eyes New Markets

For the fiscal second quarter, which ended Sept. 15, net income rose 0.5% to $10.3 million, and sales increased 0.3% to $621.6 million. For the first, half net income rose 0.1% to $16.3 million, and sales were up 0.3% to $1.2 billion.

Sales in Spartan's retail segment, which accounted for 58% of total volume, fell 0.3% to $362.3 million during the 12-week quarter, while comparable-store sales, excluding fuel, dropped 1%. The company said second-quarter sales were negatively affected by about 70 basis points by a one-week shift in the quarter-end date, which resulted in less high-volume summer sales being included in this year's second quarter. For the first half, retail segment sales fell 0.1% to $707.9 million.

In the distribution segment, which accounted for 42% of Spartan's total volume, sales rose 1.2% to $259.2 million for the quarter and increased 0.8% to $517.6 million for the half.

Operating earnings in the retail segment fell 27.8% to $8.1 million for the quarter and fell 32.7% to $12 million for the half; operating income in the distribution segment was up 23.8% to $10.9 million for the quarter and 15.5% to $18.7 million for the year-to-date period.

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