Frozen beverages, which includes ICEE, Arctic Blast and Slush Puppie; frozen beverage and related product sales were up 3% in the quarter and 7% in the six months; 2% and 6% without the sales of the ICEE distributor acquired this past summer. Beverage-related sales alone were up 8% in the quarter, 6% without the acquired ICEE distributor and 14% and 12%, respectively, for the six months. Gallon sales were up 2% for the quarter and 8% for the six months in our base ICEE business. Service revenue continues to grow and was up 9% in the quarter and 7% for the six months.
Consolidated; gross profit as a percentage of sales was 29.04% in the three-month period this year and 29.54% last year. The decrease resulted primarily from higher costs for payroll, insurance, product mix changes and significantly lower volume in specific locations.
Operating income in our food service segment decreased from $19,636,000 to $18,535,000 in the quarter for these reasons. There was also a sharp increase in distribution expense and a decrease in operating income from our biscuit business because of a recall in January. Total operating expense as a percentage of sales was 20.2% in the quarter, up from last year's 19.8%. This increase was primarily due to higher logistics and distribution expense as previously mentioned.
Capital spending and cash flow; our cash and investment securities balance was $142 million, down $1 million from our December balance. We continue to look for acquisitions as a use of our cash. $130 million of our investments are in corporate bonds with a yield to maturity of 2.3%. Our capital spending in the quarter was $12 million as we continue to invest in plant efficiencies and growing our business. We estimate our spending for the year to be about $50 million as several one-time plant and manufacturing projects have been completed or will be completed shortly. A cash dividend of $0.45 a share was declared by our Board of Directors and paid on April 4. We did not buy back any shares of our stock during the quarter.
Some other commentary; sales of our food service products improved this quarter with significant increased sales of soft pretzels in restaurants and movie theaters, funnel cakes in schools and handhelds to a handful of customers. Bakery sales, without Hill & Valley, improved this quarter as sales to private label business increased. Sales of our new Brauhaus Pretzel have been very encouraging.
Handheld sales were up a strong 15% for the quarter as we have had increases to a handful of customers, existing and new. Churros sales were up 4% even though sales of an LTO, limited-time offer, Churros were down $1.1 million. This was to a couple of customers. Soft pretzel sales in our retail supermarket segment were up a strong 10% for the quarter with Auntie Anne's recently acquired license contributing.
Operating income was up modestly in the quarter. Sales in our ICEE and frozen beverage segment were up a modest