Wegmans Cuts Grocery Prices
Rochester, N.Y. Wegmans Food Markets Inc. has begun to lower prices on hundreds of items throughout its 72 stores. The lower price strategy went into effect Thursday in response to the weak economy and the company’s expectation that its own costs will drop.
“We are lowering hundreds of prices in anticipation of our costs dropping in the future, and we intend to bring more prices down as soon as we can. These are uncertain times. We know our employees and customers are very concerned, and so are we. During difficult times like these, it’s OK with us if we make a little less money,” chief executive Danny Wegman and president Colleen Wegman said in a joint statement.
Many of the items targeted for price cuts are Wegmans brand, and will be in the bakery, meat, produce, delicatessen and general-grocery departments.
“We can be more aggressive with reductions because we have better access to detailed information on the factors that determine costs for those items,” said Jo Natale, director of media relations, Wegmans.
Natale declined to disclose the impact of the cuts on Wegmans’ bottom line, but said that based on anticipated sales of these products, the total value of price cuts to consumers would amount to $12 million on an annualized basis. For an average consumer shopping for a family, the savings could amount to as much as $40 to $60 a month.
Over the next week, Wegmans will begin to highlight the price cuts with signage in stores.
Jo-Ann Stores reports 3Q sales increase, raises outlook
HUDSON, Ohio Jo-Ann Stores reported that net sales for the third quarter ended Nov. 1, were $480.1 million compared to $480.2 million in the prior year. Same-store sales decreased 1.5% versus a same-store sales increase of 2.4% last year.
The company said it expects to report slightly improved third quarter earnings compared to last year’s third quarter earnings of 32 cents per diluted share.
Gap Inc. October comps down 16%
SAN FRANCISCO Gap Inc. reported net sales of $1.08 billion for the four-week period ended Nov. 1, a decrease of 12% as compared with net sales of $1.23 billion for the same period in 2007. Comparable-store sales decreased 16%, compared to an 8% decrease for October 2007.
Comps for Gap decreased 14%, Banana Republic saw a 17% comps drop, Old Navy posted comps of negative 20% and International comps came in at a 5% decrease.
“In October, we continued to deliver merchandise margins significantly above last year despite the tough market conditions,” said cfo Sabrina Simmons. “We are reaffirming our full-year earnings guidance and will continue to use inventory and cost management to offset what we anticipate will be a challenging holiday season.”
For the 13-week third quarter, total company net sales were $3.56 billion, a decrease of 8% from $3.85 billion in 2007. Comparable-store sales decreased 12%, compared with a decrease of 5% in the third quarter of the prior year.
Third-quarter comps fell 7% at Gap, 11% at Banana Republic, 18% at Old Navy and 1% internationally.
Gap Inc. expects diluted EPS on a GAAP basis for the third quarter to be 33 cents to 35 cents, compared with diluted EPS of 30 cents last year. The company reaffirmed that it expects full-year diluted EPS of $1.30 to $1.35 on a GAAP basis, compared with fiscal year 2007 diluted earnings per share of $1.05.