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    Value Strategy Boosts Stater Bros.' Q3 Sales

    Grocer willingly sacrificed gross margin to keep prices low

    Stater Bros.’ low-price marketing strategy has helped boost third quarter and year to date sales for the regional independent, according to Jack H. Brown, chairman, president and CEO.

    "We believe that these growths are due to our customers’ positive response to our low price marketing strategy of keeping our prices as low as possible during these continued challenging economic times while continuing to provide our customers the service and value they deserve on each of their visits to their local Stater Bros. supermarket,” said Brown.

    "At the beginning of the economic downturn, which has had such a negative impact on our customers, I said that we were in this together with them and the way to retain our customers was to share their pain by keeping our prices low, where possible not passing on the effect of inflation, and continuing to provide them with outstanding service,” he added. “We have maintained this strategy over the past several years and we continue to see the positive impact on our sales growth. The reduction in our current year-to-date net income reflects a decrease in gross profit margins. We have sacrificed gross margin in the current year periods in order to continue to hold our low prices."

    The grocer’s sales for the 13 weeks ended June 30, 2013, were $968.8 million, up $19 million or 2 percent from last year’s $949.8 million. The prior year's third quarter sales were affected by the Easter Holiday which fell in the third quarter of fiscal 2012 and in the second quarter of fiscal 2013. Without the impact of the Easter Holiday sales in the third quarter, fiscal 2013 sales increased $29.8 million or 3.18 percent over the previous year.

    For the company’s 39 weeks ended June 30, 2013, sales were $2.9 billion, up $51.2 million or 1.8 percent from last year’s $2.8 billion. Same store sales increased 3.18 percent for the quarter and 1.8 percent year to date.

    Net income for the third quarter was $10 million, up from $7.3 million in 2012. For the 39-week period of fiscal 2013, net income was $27 million, down from $32.7 million in fiscal 2012.

    "We are pleased with both our sales growth and growth in customer counts in the quarter and the thirty-nine weeks of fiscal 2013,” said Brown.

    Stater Bros. operates 166 Supermarkets in southern California.

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