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Gelson’s Markets’ parent, Arden Group, Inc., posted a 9.1 percent same-store decrease during the 13-week third quarter earnings period and an 8.3 percent comparable-sales decline during the 39-week period, both of which ended Oct. 3, 2009, vs. the same periods of 2008. Sales at the Compton, Calif.-based company, which operates 18 Gelson’s supermarkets in Southern California, were negatively affected by lingering harsh economic conditions and increased competition in its trading area, which it said is being addressed with new marketing programs to retain and attract shoppers.
Operating income for Arden, meanwhile, increased during the third quarter of 2009 vs. the third quarter of 2008, primarily due to a significant reduction in stock appreciation rights (SARs) compensation expense that was partially offset by the negative impact of reduced sales and an increase in hourly union wage rates. During the third quarter of the prior year, the company recorded SARs compensation expense of $2,489, while in the same period of the current year, it reversed previously recognized SARs compensation expenses of $135.
Further, on a year-to-date basis, Arden’s operating income decreased as a result of lower sales and higher hourly wage rates as discussed above. Lower operating income was partially offset by a decrease in SARs compensation expense of $286 and $2,300 for the first 39 weeks of fiscal 2009 and 2008, respectively.