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Ruddick improves sales by 1.9% in Q1 of fiscal 2009
10 Feb '09
5 min read
The continued emphasis that Harris Teeter places on operational efficiencies, including waste containment, improved labor management and cost controls in support departments have provided the leverage to partially offset the incremental costs associated with Harris Teeter's new store program (pre-opening costs and incremental start-up costs) and increased credit and debit card fees and other occupancy costs.
Thomas W. Dickson, Chairman of the Board, President and Chief Executive Officer of Ruddick Corporation commented that, “We, like everyone else, are facing unprecedented economic uncertainty, tumultuous market conditions, and a decreasing level of consumer confidence resulting in reduced consumer spending. We have continued to adjust our promotional spending in response to this change to encourage and drive customer loyalty and shopping visits.
Even though our customers are purchasing fewer items per shopping visit, we experienced an average increase in active households of 0.28% per comparable store (based on our loyalty card data), evidence that we are growing our customer base in those stores.
In addition, according to research data, we have increased our market share during the first quarter of fiscal 2009, in the aggregate for all of our markets. Although we are not pleased with our negative comparable store sales, our focus on store brands in our promotional activities has been well received by our customers and our store branded product penetration has increased approximately 23 basis points to 24.88%.
At the same time, we improved our gross profit margin by 54 basis points and exceeded last year's operating profit for the quarter. Our promotional activity has been effective in improving our comparable store sales trends over the past several weeks and we have realized some positive comparable store sales trends since the beginning of the second fiscal quarter.
We continue to position Harris Teeter for long-term success while taking into consideration the current economic environment and its impact on our capital expenditure program. We have reduced our fiscal 2009 capital expenditure plan by $29 million to $212 million and have revised our fiscal 2010 capital expenditures to approximately $150 million, 29% less than fiscal 2009.
To support our growing store base in Virginia, Maryland and Washington, D.C., we have recently identified a site for a new distribution center outside of Fredericksburg, VA. Pending satisfactory due diligence, we anticipate construction in fiscal years 2011 and 2012 with an opening sometime in fiscal 2012. The estimated cost for the facility and equipment is approximately $100 million. The addition of this facility will result in significant transportation expense savings.”
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Thomas W. Dickson, Chairman of the Board, President and Chief Executive Officer of Ruddick Corporation commented that, “We, like everyone else, are facing unprecedented economic uncertainty, tumultuous market conditions, and a decreasing level of consumer confidence resulting in reduced consumer spending. We have continued to adjust our promotional spending in response to this change to encourage and drive customer loyalty and shopping visits.
Even though our customers are purchasing fewer items per shopping visit, we experienced an average increase in active households of 0.28% per comparable store (based on our loyalty card data), evidence that we are growing our customer base in those stores.
In addition, according to research data, we have increased our market share during the first quarter of fiscal 2009, in the aggregate for all of our markets. Although we are not pleased with our negative comparable store sales, our focus on store brands in our promotional activities has been well received by our customers and our store branded product penetration has increased approximately 23 basis points to 24.88%.
At the same time, we improved our gross profit margin by 54 basis points and exceeded last year's operating profit for the quarter. Our promotional activity has been effective in improving our comparable store sales trends over the past several weeks and we have realized some positive comparable store sales trends since the beginning of the second fiscal quarter.
We continue to position Harris Teeter for long-term success while taking into consideration the current economic environment and its impact on our capital expenditure program. We have reduced our fiscal 2009 capital expenditure plan by $29 million to $212 million and have revised our fiscal 2010 capital expenditures to approximately $150 million, 29% less than fiscal 2009.
To support our growing store base in Virginia, Maryland and Washington, D.C., we have recently identified a site for a new distribution center outside of Fredericksburg, VA. Pending satisfactory due diligence, we anticipate construction in fiscal years 2011 and 2012 with an opening sometime in fiscal 2012. The estimated cost for the facility and equipment is approximately $100 million. The addition of this facility will result in significant transportation expense savings.”
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