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.