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Tops’ first-quarter loss shrinks from year ago

Tops Markets’ first-quarter sales dropped following some pharmacy closings and a decline in fuel prices, but the chain still reduced the size of its net loss from a year ago.

The supermarket chain on Friday reported net sales of $723 million, down 4.5 percent from a year ago. Tops’ fuel sales declined $22 million from a year ago, as the average price per gallon fell 33 percent over that time, said Frank Curci, Tops’ president and CEO.

Another factor was Tops’ closing of 27 of its in-store pharmacies in January. The chain decided those pharmacies weren’t filling enough prescriptions to justify the amount of space they occupied.

The closings “make us more efficient and allows us to better serve our customers by providing a greater variety of offerings, such as fresh produce, prepared foods and natural organic products,” Curci said. Tops still has 50 pharmacies, and will continue to open them in selected new stores, executives said.

Easter’s timing this year also had a negative effect on sales. Curci said during a conference call Friday that the week after Easter is typically slow for supermarket sales; this year, the holiday fell within the first quarter, which ended April 18, instead of in the second quarter, as it did last year.

Tops’ net loss fell to $4.2 million from $7.6 million in the first quarter a year ago. The chain’s operating expenses declined 4 percent, and its operating income jumped 66 percent from last year.

Curci said he expected Tops’ second-quarter results will be bolstered by its Monopoly promotion, which began in mid-April and will run through mid-July.

Last weekend, Tops opened two new stores, both of them east of Rochester. In Lyons, Tops renovated a building previously occupied by an independent retailer. In Walworth, Tops built a new store. Curci described both as “underserved” markets.

“We do very well in those kind of communities,” he said. “A big part of our strategy is that we have a very flexible store format, so we can go into an area where a really big store can’t go.”

The Lyons store consists of 20,000 square feet, while the Walworth store is 45,000 square feet.

David Langless, Tops’ chief financial officer, said the chain plans to spend $30 million to $40 million on capital investment this year.

That total includes the remodeling of six stores, and the opening of three to four new stores, including the two stores which just opened.