Vons Posts $21.4-Million Profit in Third Quarter

Vons Cos., bucking a general slowdown in the supermarket industry, said Wednesday that it earned $21.4 million in its third quarter on sales that rose 2.5% to $1.64 billion.

It marked the fourth consecutive profitable quarter for the Arcadia-based chain. “It’s onward and upward every quarter,” said Sarah A. Stack, an analyst with the Los Angeles-based investment firm Bateman Eichler, Hill Richards.

Vons had suffered losses totaling $54 million after acquiring 162 former Safeway stores in Southern California in August, 1988. In the third quarter last year, it reported a $5.9-million loss.

Part of the improvement in Vons’ results in the quarter ended Oct. 7 stemmed from $8 million in tax credits because of the company’s past losses. But the company, the biggest food chain in Southern California, with a market share of about 27%, also posted higher operating earnings.

Vons attributed the gain to, among other things, a reduction in what is known as shrinkage: the expenses a store incurs because of paperwork errors, theft and spoilage. Vons officials say they are focusing more attention on such areas now that they have largely completed the job of converting the former Safeway stores.

Stack said she was particularly impressed with the 4.5% sales gain at stores that have been open more than one year. Many other chains, she said, have posted gains of less than 4%.

Vons’ overall sales gain came despite the closing of 13 older stores over the past year. It now operates 321 stores in Southern California under the Vons, Pavilions, Pavilions Place and Tianguis names.