LOS ANGELES — 99 Cents Only Stores here is considering expanding its offerings of staple grocery items at prices above its 99-cent norm, Eric Schiffer, chief executive officer, told analysts this week.
The chain has been testing the sale of gallons of milk for $2.50 — an experiment that was expanded in November to about 15% of its stores, he pointed out. "Obviously there are certain families, especially at the lower-income levels, who see a big difference between buying four quarts of milk to make a gallon and paying roughly $4, versus buying a gallon for $2.50. That's a big difference, especially when you buy two gallons a week.
"It's still very early, and I can't say if we're going to expand it to all stores. But we realize it's been frustrating to our customers when we don't have an item that's a staple item, such as eggs, for example. We can buy eggs at a price that we can sell for 99 cents a dozen, but if we run out or have to break them down to six or eight to a pack, it's frustrating. But we [would like to] have some ability to make a few exceptions, as we do on gallons of milk, with some basic staple items — some way of doing it so that customers would be receptive."
For the third fiscal quarter that ended Dec. 25, the company said net income rose 8.8% to $26.6 million, while sales climbed 1.7% to $365.4 million and comparable store sales dropped 0.7%. For the year to date net income was up 29.4% to $56.4 million, and sales increased 2.9% to $1.05 billion.
