INDIANAPOLIS -- Marsh Supermarkets here said reduced administrative expenses, partly offset by lower gross margins, resulted in increased earnings for the second quarter ended Oct. 15. Sales also rose.
fell 33.6% to $4.8 million for the 28 weeks. Excluding the accounting changes, first-half income was down 9%. Sales increased 5.8% to $396.9 million for the quarter and 6% to $699.4 million for the half. Same-store sales were even for the quarter and ahead approximately 0.2% for the half. Douglas W. Dougherty, vice president and chief financial officer, said sales and gross margins "continue to be pressured by competitive activity." Kevin Silverman, a securities analyst with Kemper Securities, Chicago, said a 3% decline in selling, general and administrative expenses for the quarter -- $81.9 million, compared with $84.4 million a year ago -- is the company's first in at least four years. "Marsh has historically been a strong community benefactor, so its expense structure has always been higher by design, which has made it particularly susceptible to stiff competition and margin pressures. "But in the last year Marsh eliminated 77 headquarters positions and cut back on some community programs, including a Computers for Education program that was costing $1 million annually, and the resulting drop in SG&A, combined with some top-line growth, holds out the possibility of renewed growth in profitability," Silverman said. Marsh operates 88 supermarkets and 179 Village Pantry convenience stores in central Indiana and western Ohio; it also operates Convenience Store Distributing Co., a wholesale distributor serving 1,300 non-affiliated convenience stores, and a catering company called ALLtimate Catering. During the quarter Marsh opened three new Village Pantry units. Since the end of the quarter it has opened a new 81,000-square-foot Marsh Superstore and a replacement convenience store.