Family Dollar Turns Attention to Consumables
Cecile Corral -- Home Textiles Today, 7/9/2012 2:00:00 AM
MATTHEWS, N.C. - Family Dollar is focusing on faster-selling consumables offerings at some expense to discretionary goods in the immediate term, but hopes a new planogram rolling out in late summer will lift sales in the unsteady home department.
"Delivering stronger shareholder returns begins with increasing sales per square foot, and this quarter, we began to implement a number of initiatives to broaden our consumable assortment and satisfy more of our customers' shopping trips," explained Michael Bloom, president and coo, during the chain's third quarter earnings call late last month.
However, he added, most of these initiatives began late in the quarter, as planned, "and had little impact on our third quarter sales results."
In the quarter, sales of home and apparel "continue to be volatile," he said, citing that both categories "continue to be pressured" by the lingering macro-economic woes affecting the retailer's largely lower-income core customers.
Home product sales in the quarter declined by 1.8% to $270,015 from $275,048 as of late May 2011. In contrast, consumables were up 12.2% to $1.6 million from $1.4 million.
As a result, the 7,267-unit discount chain has opted to "delay our annual home plan-o-gram reset to enable us to focus on our consumables expansion," Bloom said. "In August with the new planogram, we expect trends in home to improve."
The new planogram is set to come out in July and be completed chain-wide by August, and "we are excited about the changes we are making [in the plan-o-gram] within our home segment," he continued.
Family Dollar's net income in the third quarter, which ended May 26, increased 12.1% to $124.5 million. Net income per share rose 16.5% to $1.06.
We would love your feedback!