LOS ANGELES — Unified Western Grocers here said new store openings and growth in specialty food categories boosted sales, while a non-recurring credit in the prior year resulted in lower earnings during the second quarter and first half that ended March 31.
Unified said earlier this month it has signed a letter of intent to purchase Associated Grocers, Seattle. Both are member-owned cooperatives.
Net income at Unified fell 10.5% to $3.6 million for the 13-week quarter and 28.3% to $7 million for the year to date, while patronage dividends dropped 17.7% to $3.6 million for the quarter but rose 7.7% to $10 million for the half. Sales rose 6.1% to $753.6 million for the quarter and 5.1% to $1.5 billion for the half.
The company said it attributed the sales increases to new stores opened by members and continued sales growth in gourmet, ethnic foods, and natural and organic products through its Market Centre subsidiary.
It said the drop in earnings was due principally to a non-recurring insurance reserve adjustment in 2006, while the increase in patronage dividends during the half was a result of higher sales combined with operating improvements.
“Earnings to date are strong and ahead of plan, and our sales continue to increase in virtually all divisions and subsidiaries,” said Al Plamann, president and chief executive officer.
Looking ahead, he said he expects technology and efficiency to continue to drive food distribution operations, while retailers “will continue to adjust their mix of offerings to include more perishable and specialty products and consumers will continue to exhibit strong demand for products that are environmentally friendly or that promote health and wellness. We believe we are well positioned as a company to meet these marketplace needs.”