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Tops' loss doubles as sales weaken

Lower meat and dairy prices, combined with a slowdown in customer traffic, caused Tops Markets' third-quarter loss to more than double, the supermarket chain said.

Tops said its sales at stores that have been open for at least a year fell by 2.9 percent because of lower meat and dairy prices, combined with competitive pressure to lower prices within its markets across upstate New York, northern Pennsylvania,  Vermont and Massachusetts.

As a result, Tops posted a third-quarter loss of $12.7 million, compared with a loss of $5.2 million a year ago.

The company's total sales grew by 1 percent to $569 million from $561 million as Tops added 12 additional supermarkets during the past year, mainly through acquisitions of independent stores.

Frank Curci, Tops' chairman and CEO, said he expects the expansion of Tops' network of 172 stores will bolster the company's sales and earnings once those supermarkets have completed the rebranding process and the company's merchandising programs are fully in place. Three of those rebranded stores in the Hudson Valley will have grand reopenings this week, with another three later this year and early next year.

In the interim, sales at the seven stores it acquired during the third quarter have declined, and the stores are breaking even, as the transition continues, Curci said. Some of the rebranded stores were closed for 36 hours and saw sales decline by about 15 percent immediately after they reopened as Tops began the transition but the stores still had empty spots on their shelves.

Tops also launched a rebranding initiative for its store-brand products in September, which Curci hopes will increase sales of its private-label products and have a noticeable impact on its sales during 2017. It also has expanded its offerings of prepared and organic foods, which tend to be more profitable.

Sales from inside Tops' stores rose by 1.6 percent during the quarter as the revenues from the new stores were partly offset by a more than 1 percent decline in meat and dairy sales caused by falling prices. Store traffic and customer spending levels also were lower during the quarter.

Revenues from its 52 fueling stations outside certain Tops markets fell by 20 percent, mainly because of lower gasoline prices and a 5 percent decline in the number of gallons sold that was attributed to the timing of the redemption weeks on its gas promotion.

"We continue to hold our own in this competitive market," Curci said during a conference call Wednesday.

The company also had $2.3 million in legal and professional expenses from its ongoing dispute over a Teamsters union pension fund and $1.2 million in one-time expenses from its August move to a new freezer warehouse in West Seneca.

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