SAN BERNARDINO, Calif. — Stater Bros. Markets here said Wednesday customer counts rose by nearly 1 million during the second quarter ended March 27 as the company promoted value pricing as part of its 75th anniversary marketing program.
Each weekly ad features a half-page of items priced at 75 cents, "which has resulted in a slight increase in basket count, reversing a trend of the past 16 months," Jack Brown, chairman and chief executive officer, told analysts during a conference call. "We've gone to all the major manufacturers, and many of the smaller ones, and told them we need products to retail at 75 cents without going below cost, and that has enabled us to offer tremendous values to our customers. A price of 75 cents is real magic, and it has stimulated traffic in the stores."
Net income rose 47% to $8.8 million for the 13-week quarter and fell 20.8% to $10 million for the half; however, excluding an after-tax gain in 2010 of $5.6 million from the sale of the company's dairy assets, net income would have been up 41.8%.
Sales rose 3% to $913.4 million for the quarter and 0.2% to $1.8 billion for the half, while comparable-store sales climbed 3.2% for the quarter — the first increase in five quarters — and 0.4% for the 26-week half.
Brown said the sales gains came in spite of the addition over the past year of expanded food departments at 22 Wal-Marts, three Wal-Mart supercenters and 46 Targets within a five-mile radius of a Stater Bros. store.