Harris Teeter Posts 4.4% Comps

SN STAFF

CHARLOTTE, N.C. — Ruddick Corp., parent of the Harris Teeter chain based here, said Thursday that comparable-store sales at the regional banner were up 4.37% in the fiscal third quarter and 2.68% year-to-date.

Harris Teeter's operating profits for the third quarter, which ended July 3, were up 17.5%, to $50.7 million, on an 8.1% increase in sales, to $1.1 billion. Through three quarters operating profits at the chain were up 10.2%, to $146 million.

Although the company said gross margins decreased as a percent of sales in the most quarter, it attributed the decline to an inventory accounting charge. The company said it was able to "pass along most of the cost inflation created by increased commodity prices."

"Despite an overall environment of slower economic growth, our customers have responded positively to our promotional activity, as evidenced by increases during the quarter in the number of units sold, number of customer visits and average basket size," said Thomas W. Dickson, chairman, president and chief executive officer of Ruddick. "In addition, we continue to see a number of our customers increase their purchases of discretionary items such as premium meats and wines, specialty breads and cheese and fresh produce, including organic items."

He added that given the weak economy, the company "remains cautious" in its expectations for the rest of the year.

The company said sales in the most recent quarter benefitted from a shift that resulted in Fourth of July holiday sales being included in the period, vs. the fourth quarter of a year ago. Comparable-store sales were calculated as though the holiday sales occurred in the third quarter of both years. The recent quarter also benefitted by an estimated 79 basis points from the inclusion of Easter holiday sales.

Ruddick said its other division, the American and Efird industrial thread operation, saw sales increase by 8.4% to $86.1 million in the third quarter. For the 39 weeks, A&E sales rose 10.7% to $241.9 million.