US: Price promotions weigh on Weis profits
A slump in fourth-quarter earnings has hit full-year profits at Philadelphia-based retailer Weis Markets.
The company saw net profit tumble almost 39% to US$8.6m during the 13 weeks to 29 December. The fall meant annual earnings decreased by 9% to $50.9m.
Weis Markets said it had persisted with some "aggressive" promotions during the fourth quarter despite a spike in wholesale food prices.
"According to the latest US Bureau of Labor Statistics' report, food-at-home price inflation increased 4.2% in 2007 while wholesale food inflation increased at a higher rate of 6.5%," Weis Markets said. "This difference contributed significantly to the decline in the company's gross profit rate."
Comparable store sales rose 4.9% during the fourth quarter and were up 3.5% across the whole of 2007.
Net sales rose 4.4% to just under $603m.
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