The Fresh Market‘s same-store sales declined 0.8 percent in the third quarter, with revenue up 1.4 percent in U.S. dollars to approximately US$500 million, as parent company Cencosud reported its strongest consolidated sales growth of the year.
The Chilean retailer said the Greensboro, North Carolina-based specialty grocer faced softer consumer demand and lower store traffic, compounded by the Cyclospora outbreak that hurt fresh produce sales. The Fresh Market’s online sales rose 17.8 percent in local currency, with online penetration reaching 9.9 percent of sales, up 139 basis points. Adjusted EBITDA margin eased to 7.4 percent from 7.5 percent, reflecting promotional activity and higher product and supply chain costs, partially offset by efficiency gains.
The Fresh Market was named Best Supermarket in the United States in the USA Today 10Best Readers’ Choice Awards for the fifth time, taking first place in four additional categories.
Parent posts 9.2 percent growth on omnichannel push
Cencosud reported consolidated third quarter revenue of 4,328 billion Chilean pesos (US$4.64 billion), up 9.2 percent, with same-store sales in its Chilean supermarket business returning to positive growth. The U.S. accounted for 11.7 percent of consolidated revenue.
“The third quarter marks a turning point and confirms that we are moving in the right direction: our sales are growing again, our supermarket business in Chile has returned to growth, and online sales are posting double-digit increases across all six countries,” said Rodrigo Larraín, CEO of Cencosud. “The transformation we are driving is already delivering tangible results, with more customers, a stronger omnichannel ecosystem, and profitability improvements in key markets.”
Digital sales grew by double digits in all six countries, led by Argentina’s 58.5 percent local-currency growth, with consolidated online sales up 17.4 percent to US$478 million and Prime subscriptions growing 39.6 percent regionally. Net income rose 477.9 percent to approximately US$54 million, helped by investment property revaluation; adjusted EBITDA of roughly US$317 million declined 5.2 percent on expense pressures in Chile and the lapped sale of the Bretas operation in Brazil.
During the quarter, Cencosud opened nine stores in Chile, opened a Giga store in São Paulo, continued a 22-store renovation program in Brazil and consolidated Colombia’s Plaza Central mall after acquiring a 51 percent stake. Cencosud operates 1,362 retail stores and 69 shopping centers in six countries with more than 116,000 employees.
Related: Fresh Market To Open 7 New US Stores As Cencosud Invests $600M