FRESH BRANDS PLANS THIRD 'FLAGSHIP'

MARK HAMSTRA

SHEBOYGAN, Wis. -- Fresh Brands here said it plans to open its third "in the round" Piggly Wiggly flagship store in the north end of this city by early next year.

The 60,000-square-foot, corporately owned store will focus on perishables and will have an expanded deli with a variety of prepared and ready-to-go items, in addition to its circular design. The site also will include the second Pig Stop gas station, which will be built with a freestanding convenience store.

The first flagship Piggly Wiggly opened here last year, and the second is due to open later this year in Kenosha, Wis.

Fresh Brands unveiled its plans for the new store shortly before releasing its second-quarter earnings, when it projected that same-store sales would be flat for the year, citing the weak economic outlook and increasing competition. Same-store sales were flat in the most recent quarter.

The company, which operates and franchises the Piggly Wiggly Brand in Wisconsin and also operates the Dick's Supermarket chain, said average transaction amounts were down, but it expected that trend to turn upward.

In a conference call discussing its earnings, Elwood Wynn, president and chief executive officer, said about a third of its stores were being impacted by new competition, including conventional supermarkets and supercenters.

The company is taking steps to compete, he said, by conducting targeted promotions, and is focusing on improving margins by investing in technologies such as labor-scheduling systems and invoice-picking devices in its warehouses.

Net income for the second quarter, which ended July 13, was up about 6.1%, to $1.88 million, on a 12.4% gain in sales, to $146.9 million, compared with results from the year-ago period.

Retail sales increased 25.2%, to $72.5 million, primarily due to the acquisition of Dick's Supermarkets in June of last year. Wholesale sales increased 2.2%, to $74.4 million, compared with the year-ago period.