Retailers

Village Comps and Profits Soar in Q3 as Chain Adjusts to COVID Crisis

Village Super Market
Courtesy Village Super Market Inc.

Village Super Market Inc., operator of 35 supermarkets under the ShopRite, Gourmet Garage and now Fairway Market banners, saw sales and profits improve in its fiscal third quarter on fast-rising sales in-store and online, despite the effects of departmental shutdowns, curtailed hours and other measures taken to contain the coronavirus pandemic.

For the 13-week period, which ended April 25, the Springfield, N.J.-based retailer saw sales climb by 15.5% to $458.3 million, while comparable-store sales increased by 13.6%. Gross margin as a percent of sales climbed to 28.34% from 27.97% in last year’s third quarter as sales leverage and promotional reductions overcame $5.5 million in new costs for worker and shopper safety measures, bonuses and temporary pay increases.

Digital sales increased by 41% in the period, and net income in the period increased 97% to $11.2 million, adjusted for one-time costs in both periods.

Village during the period officially took control of a handful on Fairway Market stores in New York acquired during that retailer's bankruptcy auction earlier this year. It acquired the Manhattan specialty chain Gourmet Garage last summer.

A $2 per hour raise for Village workers in recognition for service during the pandemic is scheduled to continue through June 14.

Village said product mix and departmental gross-margin percentages were impacted by limitations in service departments and product availability as a result of the COVID-19 outbreak. Additionally, departmental gross profits decreased due to price investments, including the ShopRite's Right Price Promise pricing strategy, a commitment to everyday low prices on the items customers purchase most frequently, introduced in October 2019, and decreased pharmacy margins as a result of continued downward pressure on prescription reimbursement rates from third-party providers.

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