Ukrop’s posts third-quarter loss
November 24, 2009 by Aaron Kremer
Richmond’s homespun grocer is having trouble staying profitable.
The grocer lost $1.4 million in the third quarter of 2009, according to a filing with the Office of Thrift Supervision. (You can see it here.) Ukrop’s and the Markel Corp. have to file financials with the OTS because the two companies own First Market Bank.
According to the filing, Ukrop’s had a profit of $465,000 in the first quarter of the year, and $1.4 million in the second quarter of this year, making this their first quarterly loss of 2009. Ukrop’s reported a total income of $140 million. The company did not have to file information in past years but has to file now because of increased oversight from federal regulators.
The company said in an email that it does not comment on financial performance.
It’s possible that the store had to take an accounting write-down, perhaps for closing a store in Roanoke, and is otherwise not doing so bad.
However, Jeff Metzger, a longtime industry reporter from Food World magazine, said that the chain has been losing market share to both lower-end and higher-end competitors, and if that trend is speeding up, then profits could slowly disappear.
For example, Whole Foods, Trader Joe’s and Fresh Market have all recently expanded in Richmond, and now Kroger is making aggressive moves to copy Ukrop’s, including adding prepared foods and carrying shoppers’ bundles to their cars. (You can read about that here.)
“There is heightened competition in Richmond and a lot more aggressive promotions and marketing activity,” Metzger said.
“And that market (Richmond) is significantly over-stored. There’s a diversity of competition in Richmond that’s never been there before.”
Metzger also said that many stores are seeing sales decline compared to last year.
Ukrop’s also showed a net cash flow of $2.9 million and a debt maturing in more than 12 months of $81.7 million.
Aaron Kremer is the BizSense editor. Please send news tips to Editor@richmondbizsense.com. Al Harris contributed to this story.
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My sense is that their loss of market share is accelerating, especially on the West End/Short Pump side of town, where they’re getting pounded. I just hate to see this, but they’ve fallen victim to their unwillingness to change with the times. Staying closed on Sunday will ultimately destroy them.
Get ready to kiss Ukrop’s good bye… Someone is going to come in and buy them. They are getting killed and their losses will start to mount.
Here in Williamsburg VA I would say there is a major fallout of Ukrops customers. With the recent openings of Trader Joes and Harris Teeter the competition is heating up. I was in both stores the other days and their parking lots were over flowing.