Distributor and retailer Nash-Finch Company has posted falling net earnings of US$3.9m for the first quarter of 2006, compared to $7.0m for Q1 last year due to lower retail revenue.

Total sales for the first quarter of 2006 were $1.035bn, compared to $882.2m in the period last year, primarily reflecting the acquisition of wholesale food distribution centres located in Lima, Ohio and Westville, Indiana from Roundy’s Supermarkets on 31 March 2005.

Corporate retail sales at Nash fell to $151.4m in the first quarter compared to $168.3m in the comparable 2005 quarter. Retail segment profits dropped to $4.3m, or 2.8% of sales, compared to $5.7m, or 3.4% of sales, in Q1 last year.

Nash operates supermarkets retailers under the Econofoods, Family Thrift Center and Sun Mar trade names.

The company said its decrease in retail profitability was primarily the result of the very competitive retail environment, the timing of the Easter holiday and the closure or sale of stores.

Food distribution segment sales for the quarter increased 38% to $620.5m, compared to $450.4m in 2005 as a result of the acquired centres, but decreased slightly without them as a result of the timing of the Easter holiday and holiday-related sales which occurred in the second quarter of fiscal 2006.

Profits from distribution also increased in the quarter, by 12.1% to $17.8m, from $15.9m last year, but decreased as a percentage of sales in the quarterly comparison, from 3.5% to 2.9% due to an increasing portion of the distribution business coming from larger and non-traditional customers wherein margins are lower.