Private Label, Online Efforts Lift Weis Sales in Q2

Weis Markets’ move to an everyday low pricing scheme for its private label products helped to drive increases in revenue and comparable-store sales during its fiscal second quarter, although gross profits remained under pressure.

The Sunbury, Pa.-based retailer said sales for the period, which ended June 29, increased by 1.9% to $888 million, while comparable-store sales climbed by 1.4%. The sales figure includes the benefit of the Easter holiday, which fell in the second quarter this year. The comparable-sales figure is adjusted for the event.

Weis introduced its Low, Low Price private label pricing program in January, calling it its “most ambitious price reduction program to date.” The strategy moved those items from a high-low to an EDLP pricing scheme intended to achieve market-low pricing on 7,000 items. The program is a key element of a value proposition tested by an increasingly competitive marketplace, including rapid expansion of discounters throughout Weis’ six-state footprint.

Weis officials also credit the company’s second-quarter performance to the rollout of its Weis 2 Go online ordering service with in-store pickup and home delivery. This program is now available in 150 of Weis’ 200 stores. Marketing and advertising programs along with targeted promotions also sparked sales in the period.

The company’s second quarter net income increased 7.2% to $20.5 million, while earnings per share totaled 76 cents. Weis said gross-profit rates continued to be affected by declining retail prices and costs in fuel, as well as produce and dairy commodities. Pharmacy gross profits were negatively affected by recent changes in industry practices.  

Weis said it countered margin pressure with greater store level efficiency.

For the 26-week period, Weis sales were up by 1% to $1.8 billion, with comps up by 1.4%. Net income for the year is down by 1.4% to $34.8 million.