Ingles Q2 Sales Benefit From New Stores, Wider Assortment

Improved store environments and wider product assortment helped to boost sales at Ingles Markets by 4.1% in its fiscal second quarter, the Asheville, N.C.-based retailer said.

The shift of the Easter holiday from last year’s third quarter to this year’s second quarter and higher per-gallon gasoline prices also helped to raise sales, according to the company, whose comparable-store sales improved by 1.7%, excluding gasoline and the effect of the holiday timing shift. Traffic also improved by 0.7% in the quarter, while average transaction size, excluding gasoline, jumped by 2.6%.

Ingles operated 201 stores in the quarter and in last year’s comparable period, but the current fleet benefited from four new stores replacing four closed units, including the redevelopment of stores closed in one period and reopened in a subsequent period.

“Our strong sales performance benefited from improvements in our store base and from the variety of products we carry,” Board Chairman Robert P. Ingle II said in a statement. “We listen to our customers and to our associates to ensure we are always focused on improvement.”

Ingles saw perishable sales increase by 5.1% in the period to $261,000, or 27.4% of $955,000 in total sales.

Gross profit for the three-month period ended March 31 increased 3.1%, to $235.2 million, or 23.9% of sales, compared with gross profit of $228.1 million, or 24.1% of sales, for last year’s second quarter. Excluding gasoline sales, retail grocery segment gross profit as a percentage of sales increased 15 basis points.

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Operating and administrative expenses increased 4.2% in the quarter, or 24.7% of sales, vs. 24.3% of sales last year—an increase attributable primarily to higher worker wages due to the additional labor hours required to accommodate new stores and in-store merchandising changes. Ingles said competition for labor also increased in its market area.