THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Thursday, July 4, 1996 TAG: 9607040560
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER
LENGTH: 36 lines
Farm Fresh Inc. reported a bigger loss in the second quarter of 1996, saying sales dropped due to soggy weather, new competition and its spin-off of Richmond-area supermarkets.
``I would have liked sales to be better, but the weather was poor in the spring . . . and all the competitors' openings didn't help,'' said Michael E. Julian, chairman, president and chief executive officer, said Wednesday. ``But I'm not unhappy with the quarter.''
Norfolk-based Farm Fresh operates 38 supermarkets and 13 Rack & Sacks - warehouse-style grocery stores - in Virginia and northeastern North Carolina. Its stronghold is in South Hampton Roads.
Recently, competitors have begun opening stores in Farm Fresh's turf. Scarborough, Maine-based Hannaford Brothers Co. has opened two stores in South Hampton Roads, while Harris Teeter Inc. of Matthews, N.C., opened a supermarket in Virginia Beach last month.
In the second quarter, which ended June 15, Farm Fresh lost $1.8 million, compared to a $1.3 million loss in the same three-month period a year ago.
Sales fell 16 percent - from $214.7 million in the year-earlier period to $180 million in the second quarter.
Julian attributed much of the decline to last year's sale of 10 Richmond-area properties to Hannaford. The Richmond stores operated under The Grocery Store banner.
Farm Fresh's same-store sales, which represent revenues at stores open at least a year, were stagnant.
Cash flow - earnings before interest, taxes, depreciation and other expenses - fell 11 percent to $10.7 million in the second quarter, from $12 million in the year-earlier period. But cash flow as a percentage of sales increased to 6 percent from 5.6 percent. by CNB