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BELLEVUE, Wash. -- Warehouse grocer Cost-U-Less, Inc., which operates 11 stores -- primarily in island markets within the Caribbean and Pacific region -- continues to grow its sales, but increasing energy prices and a store relocation dropped retailers net revenue.
Cost-U-Less's overall second quarter sales increased 2.9 percent, to $52.3 million, compared to $50.8 million for the same period a year ago. However, net income declined from $637,000 to $512,000 during the period, primarily from the opening and closing costs associated with the relocation of the company's St. Croix store.
In May, Cost-U-Less relocated its St. Croix store from the west end of the island to a location close to the main trade area in the center of the island. The size of the new store is 38,000 square feet, a 45 percent increase over the previous store.
"In the long term, we believe the relocation of our St. Croix store to be very beneficial for us," said J. Jeffrey Meder, the Cost-U-Less' president and c.e.o. "The new store has experienced a very promising start in its first two months of business, attracting many new customers from the east end of the island."
Same-store sales increased 4.9 percent over last year's second quarter. Store expenses increased 8.9 percent due to several factors, most notably higher utility expenses, and higher payroll expenses which remained constant as a percentage of store sales.
"We believe that this quarter's comparable sales on top of the prior-year quarterly comparable sales demonstrate continued support of our model in the markets we serve," added Meder. "We are challenged by the increasing cost of energy, which impacts shipping and store utility expenses, while we continue to be diligent in our competitive pricing."
On July 8, Cost-U-Less was granted approval from the Cayman Islands Trade and Business Licensing Board to operate a retail and wholesale business through a controlled subsidiary organized in the Cayman Islands. This is the first in a series of steps that must be taken before a store operating under the Cost-U-Less name could be opened in the Cayman Islands.
Cost-U-Less currently operates two stores in each of the following regions: The U.S. Virgin Islands, Netherlands Antilles, Hawaiian Islands, and Guam. The company has single store operations in California, Guam, American Samoa, and the Republic of Fiji.