Ingles Dazzles With 17.5% Q2 Comps

As eye-popping same-store sales figures continue to roll in from supermarkets revealing early results of the coronavirus era, a new “high score” was set in North Carolina.

Ingles Markets Inc., the 198-store Asheville, N.C.-based chain, said same-store sales in its fiscal second quarter ending March 28 jumped by 17.5%.

The comp figure—for the moment anyway—was the highest among food retailers to have reported this earnings season, although indications are rivals such as Albertsons could still do better based on partial results.

Precise comparisons can be difficult when accounting for different calendar start and end dates and other factors. But of the six food retailers to have posted quarterly financial results for the period ending March 28, Ingles at 17.5% narrowly surpassed Grocery Outlet (17.4%) in comps and was ahead of impressive gains at Publix (14.4%), Ahold Delhaize (13.8%), Weis Markets (12.8%) and Sprouts Farmers Markets (10.6%).

The coronavirus pandemic was declared a national emergency on March 13—a move that classified grocery stores as essential businesses while requiring its rivals in foodservice such as restaurants to shut down. Ingles, saw total sales in the period increase by 14% to $1.1 billion.

The closely held company provided few details in an earnings release. “We are very appreciative of all our store and warehouse associates that have continued to serve our customers during the COVID-19 pandemic,” Chairman Robert P. Ingle II said in a statement. “We remain focused on our tremendous obligation to provide food and other products during this unprecedented time.”

Burt P. Flickinger III, managing director of the consultancy Strategic Resource Group, said factors in Ingles’ success likely included owning and operating its distribution centers, transportation and manufacturing plants, which he said would likely have provided advantages in keeping stores stocked as consumers rushed to buy essentials in early March.

“They could go to three shifts a day in their distribution centers,” Flickinger said. “Ingles also has a great depth and range of meats, fresh foods and refrigerated goods, and their cases were fully stocked.”

Ingles ownership and control of its real estate—including shopping centers that helped with essential co-tenants—was likely also an advantage, as was experience in responding to weather disasters, added Flickinger, comparing Ingles to its larger Southeast rival Publix.

 “If Publix gets an A for their response, Ingles gets an A ,” Flickinger said.

Gross profit for the quarter totaled $291.6 million, or 25.5% of sales, up from last year’s 24.4% margin rate. And though expenses were up on labor and personnel costs, net earnings in the period soared to $40.3 million, an increase of 168.7%.

Ingles said sales for the first half of its fiscal year totaled $2.2 billion, with comps increasing by 9.7%.