Lowered expectations from Family Dollar
By Andrea Lillo -- Home Textiles Today, 12/22/2003 12:00:00 AM
MATTHEWS, NC —
Mired in a softer-than-expected holiday season, Family Dollar Stores last week lowered its expectations for the five-week period ending Jan. 3, 2004. The company said it expects sales in existing stores to increase from zero to 2 percent versus last year. It had previously predicted sales would rise from 2 percent to 4 percent.
This holiday season has come in below plan so far for Family Dollar, particularly in the Thanksgiving period and has adversely impacted its hardline sales.
However, its customers traditionally wait until the last minute to shop, said Howard Levine, chairman and ceo, during the company's first quarter conference call, especially in seasonal goods such as trim-a-tree and giftware.
Family Dollar focused its season on everyday low pricing, and did not have any Thanksgiving-related advertising activity or become promotional like other retailers, said George Mahoney, executive vp. Seasonal inventories, planned conservatively, were slightly below the prior period.
In its first quarter financial report last week, the company also noted that its low to low-middle income customers usually buy trim-a-tree, giftware and other seasonal merchandise late in the holiday season, making it difficult to estimate sales.
Executives highlighted the progress of several initiatives, including its store of the future, where the company "is trying to envision over the next five years everything we need to do to prepare for changes in the store environment and work force," said David Alexander, president and coo.
The store of the future program began with the rollout of its debit program, completed in November, and is running at or above plan. Updating the hiring process, loss prevention software and store connectivity and adding a computer portal are the other programs to be implemented within the year.
In regard to its transportation management system, Family Dollar completed its domestic in-bound system this past summer, and in January will "go live" with phase one of its international segment, which will give it visibility and reporting of its imported goods, Alexander said. Phase two will begin in the summer, increasing tracking functionality and vendor compliance reporting.
Having rolled out the reworked home department, Family Dollar said that so far customer acceptance has been positive. Domestics was 6.5 percent of sales in the first quarter in both this year and last. The company's long-term focus, however, is on building the consumables area.
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