US retailer Winn-Dixie Stores has posted a fall in first-quarter net earnings, reflecting the company's increased promotional spending as its tries to fight off competition.

The company posted net earnings of US$1.2m, or 1 cent per diluted share, for the first quarter to 17 September, compared to $34.8m, or 25 cents per diluted share, for the same quarter last year.

Sales for the 12-week period were $2.7bn, 5.8% lower than in the year-ago period. Identical store sales, which include enlargements and exclude the stores that opened or closed during the period, decreased 6.6%. Comparable store sales, which include replacement stores, also fell 6.6% for the quarter.

"Our previously reported earnings guidance of breakeven reflected our commitment to invest promotional dollars to increase sales," CEO Frank Lazaran said.

"During the quarter, we initiated a plan to increase sales and improve earnings for the remainder of the fiscal year. The plan includes increased promotional activity, lowered pricing, improved friendly service, clean stores, improved in-stock conditions, neighbourhood-specific marketing and increased capital expenditures for remodelling, especially expenditures for in-store lighting improvements," he added.

Winn-Dixie said it opened three new stores and closed one store during the quarter. The company said it had a total of 1,075 locations in operation on 17 September 2003, compared to 1,073 at 18 September 2002.