Cub Foods' owner said the frenzied pace of grocery purchases in the early days of the pandemic stay-at-home shift meant its sales for late winter and early spring were down compared with last year.
However, people were still spending more at grocery stores than in 2019.
United Natural Foods Inc., which owns grocery stores and a huge food-distribution business, reported net sales of $6.7 billion for February, March and April, a decline of nearly 6% from last year's record-setting third quarter. Still, sales were still up 7% based on a two-year measure of sales growth meant to give a more accurate financial picture.
Sales for its grocery stores, of which Cub Foods are the majority, declined 9% in the quarter from last year but had still increased based on the two-year measure.
Still, the company's net income fell 45% for the quarter to $48.6 million.
"Our results reflect our unrelenting focus on efficiency and the profitability of our business, as we cycled the highest spikes of sales revenue from pantry loading in the prior-year quarter," said United Natural Foods CEO Steven Spinner in a statement. "We continue to focus on helping our customers operate their businesses and meet the needs of their shoppers through our differentiated business model. As the industry and economic backdrop continue to evolve, UNFI remains well positioned for future growth."
During a call with analysts this week, Christopher Testa, president and chief marketing officer at United Natural Foods, said its Cub Foods and Shoppers supermarkets have continued to adapt to changing consumer habits.
A bright spot for the company was that third-quarter online sales for Cub increased 27% year over year. The company also recently expanded online ordering and delivery to include all Cub liquor stores.
UNFI acquired the Cub and Shoppers grocery stores in 2018 along with their old parent company, SuperValu. The stores were immediately put on the market but UNFI so far has not found a buyer.
Although the landscape could change in the next few years, Cub has the most stores in the Twin Cities market and has remained a market leader despite being for sale.
Spinner said there have been challenges hiring and retaining employees and the company has increased wages throughout the year including drivers in some markets.
Despite the dip in sales from last year, company executives said the performance was in line with expectations and keeps United Natural Foods on track to deliver another record year.
United Natural Foods plans to sell Shoppers and Cub Foods, but the pandemic pushed those plans back.