Officials at Giant Food Inc., the Landover-based supermarket powerhouse, reported a 19 percent increase in profit in the third quarter, with sales rising 3 percent.
But same-store sales were nearly flat, increasing only 0.2 percent. Same-store sales represent sales at stores open a year or more and are considered the most accurate barometer of a retailer's performance. In the past, Giant's same-store sales increases have typically ranged from 4 percent to 5 percent.
The company blamed the "general slowdown" in the Washington-area economy for the slowing growth in its sales.
In the three months ended Nov. 3, net income rose to $24.9 million (42 cents per share), up from $20.9 million (35 cents) a year ago. Sales for the quarter increased to $757.59 million from $734.99 million in the same period last year.
"The D.C. economy is not good, and it's hard to know when it is going to break," said David Sykes, Giant treasurer and senior vice president. Sykes also said older Giant stores were affected by newer Giant stores nearby that "cannibalize" sales. Other industry observers say that Giant is also getting increased competition from new membership warehouse clubs.
For the first nine months, Giant's profit rose 14 percent to $79.2 million ($1.33), up from $69.6 million ($1.16). Sales were up 4.5 percent to $2.3 billion for the 36 weeks ended Nov. 3, compared with $2.2 billion last year. Same-store sales grew 1.5 percent.
Citing flat October retail results that the Commerce Department released last week, which showed food store sales declining 0.5 percent, Sykes said Giant's ability to control costs was integral to its ability to improve sales and profits.
QuesTech Inc., a Falls Church defense services contractor, reported that its third-quarter profit increased despite falling revenue.
The company's net income for the quarter ended Sept. 30 was $86,900, compared with a loss of $42,200 in the same quarter last year. The company's revenue fell 24 percent to $11.17 million from $14.75 million. QuesTech credited the improvement to reduced operating expenses.