RICHMOND, Va. -- Richfood Holdings here reported record net earnings of $5 million in its third quarter ended Jan. 8.
d quarter. Third-quarter sales included about $2.7 million of sales at former Safeway stores in the Richmond area, which were acquired earlier in the quarter by Richfood customers, and $47.4 million of sales to customers supplied as a result of last year's acquisition of B. Green & Co.'s civilian wholesale operations. On a comparable basis, or excluding the new business, Richfood said sales rose 2.5% in the third quarter. Gross margin totaled 8.45% of sales in the quarter, compared with 8.44% last year. Operating and administrative expenses declined 28 basis points to 5.59% of sales, or $16.5 million.
Donald D. Bennett, president and chief executive officer, said Richfood acquired three Pack 'n Save retail grocery stores in Raleigh, N.C., from a single operator during the quarter. Financial terms were not disclosed.
Bennett said the stores, which had previously been supplied by Richfood, were "hampered by inconsistent marketing and merchandising programs, resulting in the stores' inability to operate profitably." Richfood will retain the stores and attempt to make them profitable by maintaining consistency in operations and providing lower-priced, quality products, Richfood executives said.
Richfood also increased the productivity in its warehouse, which contributed to the improved expense ratio. Richfood supplies about 750 supermarkets in five Mid-Atlantic states.