Dive Brief:
- Ingles Markets reported net sales of $946.2 million for its second quarter of 2017, increasing by $21.9 million, or 2.4% from last year, according to Progressive Grocer.
- Net income for the company came in at $9.2 million, a drop from the $14.4 million it saw last year. The company lacked the benefit of 2016's earlier Easter and milder weather.
- Based in Asheville, N.C., Ingles operates 201 supermarkets in total, as well as neighborhood shopping centers, most of which contain an Ingles supermarket.
Dive Insight:
Analysts seem bullish on Ingles, and the company lived up to the hype with a sales increase in Q2 even as net income slid, the result of outside factors such as the weather. “Our stores reported higher sales in the second quarter as we continued to deliver a great shopping experience to our customers,” Robert Ingle II, chairman of the company, said in a statement. “We expect our planned investments in new and existing stores to contribute to our long-term performance.”
The investments in its stores are a wise choice. One thing the retailer needs to be mindful of is the upcoming addition of Lidl in the U.S., which may make the company a little vulnerable. In areas where Lidl competes with Ingles Markets directly, consumers may want to experiment and check out the new store, so Ingles needs to do what it can to keep its customers coming through the doors. Publix also now operates in nearly all states where Ingles has locations, including North Carolina where it has its headquarters.
People are looking for good deals and lower prices, and Ingles Markets offers both. Buzz about the retailer is growing and as more people learn about the retailer, it should continue to do well and post strong quarterly earnings. One thing to watch going forward is that as grocers look to consolidate and boost their already tight margins, companies such as Ingles could be a potential takeover target from Kroger or another retailer.