The average margin in the quarter increased about 90 basis points to 33.4%, primarily due to a onetime gross profit benefit related to the cigarette tax change. Towards the end of the quarter, we have seen a more competitive pricing on cigarette packs in parts of our marketing territory. Cigarettes are an important destination item in a convenience store industry. We believe it is imperative to remain competitive in this product line to maintain market share and long-term sales growth in other products. In light of this, we have recently adjusted pricing to match this change in about 1/3 of our stores.

Overall, we are pleased with the gains in the Grocery & Other Merchandise category and anticipate acceleration in revenue throughout the fiscal year as we benefit from the rollout of additional operational initiatives. That being said, we also expect the same-store sales in cigarettes to continue to be adversely impacted by the challenges mentioned previously.

Prepared Food & Fountain category continues to perform very well. Total sales were up 15.2% to $142.7 million for the quarter. Same-store sales in the quarter were up 10.6% with an average margin of 63.5%, up 220 basis points from the same quarter a year ago. This is primarily due to lower commodity costs and a price increase implemented in February.

The average cost of cheese this quarter was $1.81 per pound compared to $2.11 a year ago. The average cost of coffee was about $0.90 a pound lower this year compared to the first quarter a year ago.

Gross profit dollars in the quarter were up over 19% to $90.6 million. Same-store sales in August are turning ahead of our annual goal. However, commodity prices have been trending upwards so far in the second quarter. Average cost of cheese is currently approximately $2.05 per pound.

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