MATTHEWS, N.C. — Quarterly net income at the parent company of Harris Teeter declined by 4.7% as promotional prices cut into profits and comparable-store sales were flat, the company here said Thursday.
Net earnings of $22.9 million for the 13-week period ending March 29 also reflected sales declines and a $4.6 million operating loss at American & Efird, a textile division of Ruddick Corp. Sales at Harris Teeter increased by 6.3% to $949.4 million in the quarter, primarily attributable to new stores.
Operating profit at Harris Teeter declined 3% to $45 million as the company required additional promotional spending to serve more value-conscious shoppers. Comparable-store sales of 0.09% were impacted negatively by cannibalization from new stores and from an increased penetration of lower-priced store brands in the overall sales mix, the company said.
“These periods of economic uncertainty, rising unemployment and declining consumer confidence are changing our customers’ spending habits and shopping demand,” Thomas W. Dickson, chairman, president and chief executive officer, said in a statement. “Therefore we have been enhancing the overall value we deliver to customers in response to these changing consumer needs.”
Harris Teeter sales for the 26-week year-to-date were up 5% to $1.88 billion while operating profits were down by 1.8% to $89.4 million.
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