Dive Brief:
- Weis Markets plans to begin construction on six new stores this year that will open in 2025, according to a company earnings release. This marks a significant uptick in openings for the company compared to the past few years.
- The grocer also plans to open five new fuel centers this year and complete 11 major store remodels as well as 15 minor store remodels.
- Weis reported a 3.3% increase in comp sales and saw net sales rise $14 million in the first quarter, thanks in part to the Easter holiday falling in Q1 this year. Net income declined 10.3%, to just over $23 million.
Dive Insight:
Weis Markets’ growth spurt comes as the chain has worked through supply chain disruptions that slowed its growth over the past two years.
The grocer, which normally opens or relocates two or three stores per year, didn’t open any stores last year and opened two locations in 2022. “Significant labor and supply chain disruptions” during those two years pushed development projects back, the company said in its yearly report issued in February. Grocers across the U.S. have grappled with similar construction delays in recent years due to supply chain snarls.
In 2021, Weis opened four stores — but also closed that many locations. Since 2020, the company has shuttered nine locations and opened just eight, according to its yearly report.
Wednesday’s announcement didn’t note where Weis plans to open the six new stores.
The grocer’s store remodeling plans, meanwhile, include updated store decor, expanded product sets and additional foodservice offerings. A store in Tannersville, Pennsylvania, that’s undergoing a major remodel will add new deli and foodservice cases, expand its beer and wine cafe, and update the bakery and floral departments.
Store remodels like these are helping Weis and other regional grocers stay competitive with well-capitalized competitors like Walmart. But these hefty investments along with the host of operational challenges are cutting into companies’ bottom lines.
In Wednesday’s release, Chairman, President and CEO Jonathan H. Weis emphasized these drags on profit, which range from pharmacy costs to technology improvements.
“We continue to navigate marketplace trends of product cost and third-party services inflation, declining government benefits, and the increasing mix of our pharmacy retail business which has a lower margin than our grocery business," said Weis. "In addition, we increased investments in our associates, technologies, and facilities that improve efficiencies and enhance customer experience.”
Weis Markets operates 196 stores across seven states.
