Arden Group Profit Triples in 1st Quarter

Arden Group Inc., the Compton-based parent company of Gelson’s Markets, said Monday that its first-quarter earnings more than tripled as it gained customers from rivals during the California supermarket strike and lockout.

The 4 1/2-month supermarket strike, which idled more than 59,000 workers until Feb. 29, pitted the United Food and Commercial Workers union against Albertsons Inc.; Ralphs, owned by Kroger Co.; and Vons and Pavilions, owned by Safeway Inc. Gelson’s grocery clerks also were UFCW members, but they had agreed before the dispute to continue working under a contract extension.

Arden Group officials said earnings for the 17-store chain rose to $8.6 million, or $2.53 a share, compared with $2.8 million, or 82 cents, a year earlier. Sales rose 48% to $148.4 million from $100.4 million.

Analysts noted that Arden Group’s improved results were in line with the record first-quarter sales and earnings reported by the 158-store Stater Bros. supermarket chain. Colton-based Stater Bros. Holdings Inc.’s quarterly earnings soared to $34.6 million for the period that ended in December, compared with $2.9 million a year earlier.

Analysts also said Arden Group had a chance to sustain some of its improved traffic from the strike in spite of the fact that its prices tended to be higher than those of competitors.

“I think some people have converted, people who are willing to spend 5 to 10% more to get better quality and service and to have people greeting them by name again,” said Douglas Christopher, an analyst for Crowell, Weedon & Co. “Some customers were insulted so much during the strike that they aren’t going back” to their old stores.

Shares of Arden Group fell 35 cents Monday to $71.49 on Nasdaq.