Spartan Stores Sales Continue To Climb
BYRON CENTER — Spartan Stores Inc. on Thursday reported a five-year high for consolidated net sales for the third quarter, and Chairman and CEO Craig Sturken said the public company would boost capital spending to remodel four stores beginning in the fourth quarter.
Third-quarter consolidated net sales increased by 15.6 percent to $826 million, which was attributed to last year’s acquisition of the Felpausch chain as well as sales growth and cost containment in distribution. Earnings increased by 17 percent to $15.6 million.
On the retail side, net sales grew 26.9 percent to $415.4 million, buoyed also by 3.4 percent growth in the grocery stores. Retail operating earning slipped to $4 million from $5.6 million during last year’s third quarter. Sturken said grand re-openings for four remodeled stores, a grand opening for a replacement store and lower pharmacy sales accounted for the gap.
In distribution, net sales bumped up 6 percent to $410.7 million, despite the Felpausch purchase, which removed $34.4 million from distribution sales. Operating earnings jumped 48.9 percent, with more sales, controlling costs and higher gross margin rates.
Sturken told analysts Thursday that the company, pleased with consumer response to its new and newly remodeled stores, has decided to go ahead with plans to remodel four Felpausch stores and a Glen’s Market in northern Michigan. One Felpausch store will become a D&W Fresh Market and another will convert to the Family Fare banner, he said.
“We’re pleased with yearly sales in stores where investments have been made,” Sturken said.
Capital expenditures for the current fiscal year now will range between $47 million and $52 million. Construction is expected to conclude in the 2009 fiscal year.
Spartan announced last month that it intends to build a new D&W store at Michigan Street and Fuller Avenue, just east of Grand Rapids’ rapidly developing medical development. The public company has not announced plans for replacing the Northland Drive Family Fare in Plainfield Township, where plans to move the store north to Seven Mile Road NE were scuttled after vehement objections from residents.