SAN BERNARDINO, Calif. — Stater Bros. Markets here is seeing increases in transactions and customer counts as it continues to hold the line on prices as part of its marketing strategy, Jack Brown, chairman and chief executive officer, told bondholders Wednesday.
We don't want to lose our low price image, and the consumer appreciates the fact we drag our feet on any cost increases as long as we can give them the benefit," he explained.
Brown said Stater has been able to pass on inflation increases of "a little under 1%" at the shelf, despite an overall cost increase of 2.5% to 3%.
"Inflation was a bigger factor in the second half, and it was climbing steadily," he noted. "But inflation is only a factor if the competition allows you to pass all of it through, which our competitors in Southern California do not."
For the 13-week fiscal fourth quarter, which ended Sept. 25, net income increased 9.2% to $6.5 million, while sales rose 5% to $941.8 million and comparable store sales also climbed 5%.
For the fiscal year net income was up 6.9% o $26.3 million, with sales rising 2.4% to $3.7 billion and comps up 2.5%. Gross margin fell 67 basis points to 27.15% for the quarter and 6 basis points to 26.83% for the year.