99 Cents Only Tests Food-Pricing Initiatives

ELLIOT ZWIEBACH

LOS ANGELES — 99 Cents Only Stores here is testing the sale of gallons of milk at market prices and produce by the pound in its 32 Texas stores and is beginning to expand some of those tests to stores in California, the company said in a conference call discussing earnings this week.

“The one comment we get most from people in the stores is that they go to the supermarket for gallons of milk because the quarts we sell don't cut it for a big family” said Eric Schiffer, chief executive officer. “So we put gallons of milk into the Texas stores, and we've had very positive reaction. Obviously we can't sell a gallon of milk for a buck, so our price range depends on the weekly price we pay, and our prices are, if not the best in town, as good as anybody else, and we feel that helps drive business to our stores.”

The company is also testing offering produce by the pound instead of 99 cents per package, Schiffer added. “We're making upgrades to our point-of-sale systems to allow us to do a lot more of these things with pricing," he explained.

For the fourth quarter, which ended March 27, net income rose 141% to $16.9 million, sales were up 4.3% to $302.1 million and same-store sales increased 2.3%. For the year net income rose 610% to $60.9 million, sales rose 4% to $1.3 billion, and same-store sales rose 3.9%.

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