Sales, earnings plummet at Fairway Market

The CEO of Fairway says promotional and merchandising efforts affected traffic in the first quarter as the company posted a sharp decline in same store sales.

Jack Murphy, Fairway Market's CEO, said: "I am pleased with our performance this quarter in a number of important operational areas including our gross margin which was driven by better selling margins and improved shrink. We also performed well on expenses with progress in labor management and other expense categories. Importantly, we also strategically invested approximately $2.8 million to launch advertising, promotional and customer acquisition campaigns that we believe will eventually benefit our top line."

Fairway reported that for the first quarter ended June 28, the company had a loss of $13.9 million Net sales were $193.8 million for the first quarter compared to $198.3 million for the first quarter of fiscal 2015.Same store sales decreased 5.3% for the first quarter of fiscal 2016 compared to the first quarter of fiscal 2015. Customer transactions in comparable stores decreased by 7.4%, although the average transaction size increased by 2.3% compared to the first quarter of last year.

"Our same store sales performance in the quarter was impacted by a New York City-based competitive opening and an increase in promotional activity," Murphy said. "Excluding these items, our same store sales for the quarter were down approximately 2.3%. We are, however, seeing some positive developments in several of our suburban locations from our efforts."

Fairway said it is engaged in development and design activities for new Fairway locations and expects many of these elements will be reflected in a new store in the Mill Basin area of Brooklyn, which is scheduled to open in mid-2016.

Murphy added: "We believe the new format will result in great shopping benefits for our customers while also generating solid returns for Fairway. The new store format, improved gross margin and labor performance and the strategic actions to build our customer base are all important efforts in our long-term improvement plan for Fairway."