Village posts Q1 gains on inflation, productivity improvements

ShopRite operator Village Super Market said inflation and new store openings helped drive sales gains of about 5.2% in the first quarter, as the company added a new Gourmet Garage location in New York City and converted a former Fairway in Pelham, N.Y., to the ShopRite banner.

In addition, net income increased by 51% in the quarter, to $11.1 million, driven in part by gross margin gains and reduced operating costs as a percent of sales in the 13-week period, which ended Oct. 29.

Same-store sales were up 4.3% for the quarter, which the company attributed to inflation, and same-store digital sales rose 5.5%. Total sales were $519.7 million, vs. $494.2 million in the year-ago first quarter.

Springfield, N.J.-based Village, a member of the Wakefern Food Corp. cooperative, operates 34 supermarkets in New York, New Jersey, Maryland, and Pennsylvania, mostly under the ShopRite banner.

The company said its gross profit as a percent of sales in the quarter increased to 28.73%, vs. 28.36% a year ago, primarily due to increased departmental gross margin percentages and decreased warehouse assessment charges from Wakefern.

The company also reduced operating and administrative costs in the quarter to 24.16% of sales, vs. 24.54% a year ago, primarily through lower costs for labor and fringe benefits and decreased supply spending. Labor costs and fringe benefits decreased due primarily to productivity initiatives and sales leverage, partially offset by pay rate increases, the company said.

The sales and profit gains at Village followed Wakefern Food Corp.’s strongest sales performance of the past five years in fiscal 2022, with sales up 4.7%, to $18.6 billion.