INDIANAPOLIS -- Marsh Supermarkets here said sales increased for the third quarter and 40 weeks ended Jan. 7. Net income for the 12-week quarter rose 12% to $1.8 million but fell 25.5% to $6.5 million for the 40 weeks following a change in accounting principles that boosted earnings in the prior year. Prior to the accounting change, income would have been down 4.4% from the prior year. Sales and other revenues rose 6% to $307 million for the quarter and 6% to $1.007 billion for the 40 weeks. Same-store sales rose 1% for the quarter and approximately 0.5% for the year to date. The company attributed the improvement in net income for the quarter "to reduced administrative expense and tax accruals below last year, partially offset by lower gross margin." The company also said taxes had been overestimated in the prior two quarters. David Lebedeff, a securities analyst with Raffensperger Hughes here, said the expansion of Meijer Inc., Grand Rapids, Mich., into the market here has prompted Marsh to tighten margins and cut costs at the administrative level. "At store level Marsh is putting more emphasis on delicatessens, fresh fish, bakeries, catering and other high-margin perishables areas, and it's focusing on a higher-end customer who prefers convenience to spending a lot of time in a big store," Lebedeff said. Marsh operates 89 supermarkets and 181 Village Pantry convenience stores in central Indiana and western Ohio. During the third quarter it opened an 81,000-square-foot superstore and two convenience stores and completed the previously disclosed acquisition of the assets of Crystal Catering here.
