Weis Markets to boost capital expenditures this year

Weis Markets is hoisting is capital spending budget for 2023 to fuel a more aggressive store upgrade program.

Plans call for the Mid-Atlantic grocer to to invest more than $160 million in capital expenditures this year, up from an estimated $150 million reported in the company’s fiscal 2022 10-K filing with the Securities and Exchange Commission. Chairman and CEO Jonathan Weis announced the updated capex program on Thursday at the retailer’s annual shareholders meeting in its hometown of Sunbury, Pennsylvania.

“In 2023, we plan to invest more than $160 million in our capital expenditure program,” Weis told stockholders. “Our budget includes 20 remodels, six fuel centers, one addition and one new store, which will open in 2024.”

In its annual report, Weis Markets said capital outlays slated for this year included new store construction, store expansions and remodels, the acquisition of sites for future stores, new technology purchases, and distribution facility and transportation fleet upgrades, as well as carryover projects from 2022.

“We have five new stores in active planning stages,” according to Weis. “Our budget also includes thousands of store improvement projects, which improve efficiencies and drive sales.”

At the shareholders meeting, Chairman and CEO Jonathan Weis noted the benefits of price investments in 2022. / Photo courtesy of Weis Markets

The 2023 capex plan will build on robust brick-and-mortar investment over the past two years. Weis Markets had raised its capital spending budget by 11% to $150 million for 2022, when the grocer opened one new store (in Warminster, Pennsylvania) and three new fuel centers plus completed 10 remodels, one rebuild and a “record number” of smaller projects. In 2021, the company opened three replacement stores (in Gap, Bethlehem and Macungie, Pennsylvania) and a new store (in Martinsburg, West Virginia) and wrapped up 13 major remodels, added nine fuel centers and made more than 1,100 smaller store improvements.

Thus far in 2023, Weis has remodeled its supermarket in Dover, Pennsylvania, and announced major remodels of its stores in Thurmont and on Shank Farm Way in Hagerstown, including new interior decor, updated service departments and expanded variety across store categories. The company also opened Gas N’ Go Fuel Center at the Thurmont location.

“In fiscal year 2022, inflation hit a 40-year high. While inflation was helpful to our sales, higher energy, fuel and product costs put considerable pressure on our profits,” Weis stated at the shareholder event, where he also reviewed the company’s financial performance.

In the 53-week 2022 fiscal year, Weis Markets tallied sales of $4.7 billion, up 11.2% from $4.22 billion in fiscal 2021, which had 52 weeks and generated a 2.7% annual gain at the top line. Adjusted for the extra week in 2022, same-store sales climbed 8.8% year over year and grew 10.5% on a two-year stack. Full-year 2022 net earnings swelled 15% to $125.2 million ($4.65 per share) from $108.8 million ($4.05 per share) in fiscal 2021.

Weis noted that price investments last year lent a hand to financially squeezed shoppers in the inflationary environment while enabling the supermarket chain to better compete and drive sales.

“Record inflation also put an enormous strain on our customers’ budgets. In response, we continued to expand our ‘Low, Low Price’ program in 2022. It now includes more than 9,000 of our best-selling grocery, frozen and produce items,” he explained. “This price investment helped our customers and our business. Customers saved more than $10 million while we competed effectively in our seven-state market area."

Weis Markets finished 2022 with 197 stores—the same as a year earlier—in Pennsylvania, Maryland, Delaware, New Jersey, New York, West Virginia and Virginia.

“Our continued success is due to the hard work and commitment of our associates,” Weis added. “Over the past three years, they’ve faced extraordinary challenges and helped us move forward in a highly competitive market. We are truly grateful for all they do.”