BYRON TOWNSHIP -- The addition of D&W Food Centers to Spartan Stores Inc.'s retail division helped boost second-quarter earnings more than 36 percent to a record $9.3 million.

The D&W acquisition earlier this year, plus strong comparable store sales growth and new business in Spartan's wholesale distribution division, increased to 44 cents the earnings per share, compared with 32 cents per share for the same quarter last year.

Net sales across all segments for the quarter ended Sept. 9 increased to $559.4 million, compared with $485.5 million last year.

Second-quarter operating expenses increased to $94.3 million, or 16.8 percent, compared to $81.3 million or 16.7 percent last year, due to higher costs with the D&W acquisition, increased utility, fuel costs and bank-card fees.

"We are very pleased with our second-quarter financial performance," Craig Sturken, Spartan's chief executive, said in a statement. "(This) is a result of successful execution of each of our core business strategies, (including) acquisitions, improved merchandising, marketing, store operating procedures and higher sales penetration with existing distribution customers."

Spartan owns and operates 68 supermarkets under the banners of Family Fare Supermarkets, D&W Fresh Markets and Glen's Markets in Michigan and 19 The Pharm discount drugstores in Ohio.

The 10th-largest wholesale distributor in the country, Spartan also provides more than 40,000 private-label and national brand products to 350 independent grocery stores in Michigan, Ohio and Indiana.

In its retail grocery division, the gain of 16 D&W stores increased net sales 25.3 percent to $277.9 million. Additionally, comparable store sales growth during both second quarters increased 6.4 percent. Operating earnings increased 50 percent to $9.9 million.

Spartan also benefited from closure of 14 Carters Inc. stores in its market area, which resulted in customer gains, said Jeanne Norcross, company spokeswoman. Spartan has purchased five Carters stores.

The retailer also gained 3.5 percent toward total sales with the operation of seven fuel centers, with the newest location recently opened in front of a Family Fare grocery at 1225 Leonard St. NE. Two others are planned in Cedar Springs and Caledonia.

Net sales for Spartan's wholesale distribution segment increased 6.8 percent to $281.5 million, up from $263.7 million in last year's second quarter. That was due to an increase in sales to existing customers, a better product mix, improved fixed costs and insurance reserve adjustments.

Operating earnings increased 38.1 percent to $7.9 million.

Spartan also announced it ratified a five-year labor contract with warehouse transportation and maintenance workers at its main distribution center, 850 76th St. SW. The contract covers more than 600 employees in Teamsters Local 406.

Spartan stock closed at $17.98 per share on Wednesday, up 1.18 percent.

_______________________________________________________________

By Mary Radigan
The Grand Rapids Press

©2006 Grand Rapids Press

© 2006 Michigan Live. All Rights Reserved.