Susser Holdings Corporation Q2 2009 Earnings Call Transcript

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2009-08-05 12:35:43.0

Tags: Morgan Keegan & Co., Cigarette, Call Transcript, Earnings, Taxes, Free Trade, Personal Finance, Financial Planning, Finance, Seeking Alpha, Susser Holdings Corp.

Question-and-Answer Session

Operator

(Operator instructions) And our first question comes from the line of John Lawrence with Morgan Keegan. Please go ahead.

John Lawrence -- Morgan Keegan

Sam, would you just start off by talking just a little bit about how much do you think – I think you blended the two things in as far as merchandise margin and I guess how much was the cigarette tax impacting the comps and the margin, just that line item?

Sam Susser

Cigarette comps were low double digits for the quarter and our business excluding cigarettes for the quarter was in the black between probably 2%and 3%, John, and on a year-to-date basis if we strip cigarettes out of the business entirely, the merchandise business is – it was up probably 4% to 5% for the year-to-date. The inflation in cigarettes is two-fold. Everybody I think is well of the federal excise tax increase, but, manufacturers also took some pretty healthy price increases right before the tax was implemented. So, the overall inflation is running $1 a pack or more.

John Lawrence -- Morgan Keegan

And secondly, and I will go back in the queue, is that can you talk about some of those. You mentioned some new items, some new things that you are looking at working at toward I guess opening price point that type of thing.

Sam Susser

We have made several introductions of private-label items this year, John, as kind of expanding our fun items and value items both in packaged beverages and candy, and the snack area. And we are very pleased with those introductions and just the overall positioning of our private label. Still a growth area for us as we get more scale. We hope to be able to make more sense out of more products in the private-label arena. We are also focusing with suppliers on getting this magical price points across a number of categories, and we are doing a lot of cross-selling and running a lot of incentives inside our stores in conjunction with our supply partners. So, there are tremendous amount of contest, handy gum and the like, varies from one month to the next, but--

John Lawrence -- Morgan Keegan

And then Sam, from a timing standpoint, have these been just developing through the summer or was there a real start date for those programs?

Sam Susser

I would say just developing throughout the year on the (inaudible) early in the year that unemployment was going to continue to move north and we had to get accurate and we are aggressively working on merchandizing in our sales contest and some local store marketing incentives in a manner that we have never done before. And we are grateful that we’ve done it. We are driving traffic.

 

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