US retailer Ingles Markets has posted a drop in first-quarter net income despite a rise in sales.

For the period ended 27 December, net income totalled US$11.1m - a drop from $12.7m for the comparable period in 2007.

Robert Ingle, chief executive officer, said: "We had a good holiday season for sales, but difficult economic conditions are having an effect on our operations."

Ingles Markets posted a comparable-store sales increased of $35m, or 5.4%, excluding gasoline sales.

The company said the performance was not as strong as its recent quarters, reflecting the current economic recession and the effect on consumer spending.

Total operating expenses were $167.9m for the quarter compared with $150.3m for the comparable fiscal 2008 quarter. The growth was due in part to eleven stores that were opened or remodelled in the past nine months.