Metro supermarkets' in-store fast-food counters and bank branches helped generate robust sales gains in the chain's most recent fiscal year and helped boost its parent Super Rite Corp.'s profit by 28.9 percent, financial results released yesterday showed.
Super Rite, a Harrisburg, Pa.-based food wholesaler, owns both Metro and Basics grocery stores, almost all of which are in the Baltimore area.
For the 53 weeks ended March 4, sales in Metro and Basics stores open for at least a year increased by 10 percent compared with the previous year.
"The Metro stores continue to do great," said Kurt Funderburg, a financial analyst who follows Super Rite for Baltimore investment house Ferris, Baker Watts Inc. "That is the only supermarket chain that I know of in the country that is showing double-digit same-store sales gains."
Most supermarkets have been generating same-store revenue gains of between 1 percent and 3 percent, said Jeff Metzger, publisher of Food World, a Columbia-based trade monthly. Giant Food Inc., the area market leader based in Landover, reported comparable-sales gains of 0.9 percent in its most recent quarter.
Metro/Basics' results came on top of a 9.9 percent same-store revenue increase a year ago. "This was not a lifting of weak results," Mr. Metzger said. "This was a stronger year on top of an already strong year." While percentage comparisons were given by the company, the dollar value of Metro/Basics' sales wasn't disclosed.
Super Rite operates eight Metro stores and seven Basics stores. But the Metro venues, with their in-store pizza, pretzel and stir-fry kiosks, represent its future. The chain has capitalized on the same trend that has made Boston Chicken one of the fastest-growing restaurant companies: Americans' growing appetite for prepared, take-home food.
Super Rite has steadily been selling its smaller Basics units and converting larger ones to Metros.
The average U.S. supermarket generates about $500 per square foot in annual sales, according to the Food Marketing Institute, a national trade group. A year ago Metro/Basics was taking in an average of $692 per square foot, Mr. Metzger said. Counted by themselves, the Metro stores probably would have been close to Giant's $806 per square foot, which was No. 1 for the area, Mr. Metzger said.
Metro's success should prompt other local grocers to boost offerings of prepared food and other convenience products, Mr. Funderburg said.
Analysts predicted another strong year for Metro, but its effect on area competitors may be blunted by its expected slow growth. Super Rite plans to convert two more Basics to Metros this year and start construction on two Metro stores by early next year, said Metro/Basics President John Ryder. But at least one of the new stores may be in Delaware, he said, where the company already has an outlet.
"It's going to be a little more difficult now" to find Baltimore-area store sites, Mr. Metzger said. "There are a limited number of locations available, unless Basics/Metro/Super Rite changes its philosophy on how much it's going to spend on leaseholds."
Meanwhile, Super Rite's wholesale business is improving, too. The company is benefiting from new sales accounts and better cost control, said Mr. Funderburg, who was expecting a profit of 35 cents a share for the most recent quarter. Super Rite earned 39 cents a share.
For the 53 weeks ended March 4, Super Rite earned $12.95 million, or $1.34 a share, on sales of $1.47 billion. Sales rose 17 percent.
For the 14 weeks ended March 4, Super Rite earned $3.76 million, up 46.9 percent from the year before. Super Rite's stock JTC price rose by 25 cents yesterday to $15.75 a share.