MINNEAPOLIS -- Supervalu here said last week its third-quarter sales were impacted by weak confidence among low-income consumers.
Sales for the 12-week quarter ended Dec. 4, 2004, fell 3.9% to $4.6 billion, and net income rose 33.6% to $64.9 million. For the 40 weeks, sales declined 1.4% to $15 billion, and net income rose 58.7% to $292.2 million.
"Our quarter reflected weak consumer sentiment as Americans were focused on the job market and fuel prices. While the small, higher-income segment of the population continued to spend, the much larger lower-income segment was more cautious," said Jeff Noddle, chairman and chief executive officer.
In Supervalu's retail food segment, sales for the quarter increased 0.5% to $2.4 billion, with comparable-store sales down 0.4%. Comps at corporate Save-A-Lot stores were slightly negative, which the company said was due primarily to the impact of three hurricanes that affected 20% of the stores. Operating earnings jumped 21.4% to $101.3 million, a record level.
For the 40-week period, sales were up 3% to $8 billion, and operating earnings rose 9.6% to $335.3 million.
In the distribution segment, sales for the quarter declined 8.5% to $2.1 billion, and operating earnings fell 2.2% to $59.5 million. For the year to date, sales dropped 6.1% to $7 billion, and operating earnings rose 5.2% to $175.2 million.
Despite declines in distribution segment sales, Noddle said new business growth in the segment was 4% -- "our strongest in many quarters, as new customers recognized the capabilities and technological advantages our business offerings can deliver," he explained.