Family Dollar Ups Home, Tests Urban Stores

Matthews, N.C. — “Both our home and seasonal departments performed well, supported by in-store presentation efforts and advertising and marketing programs,” said Family Dollar chairman of the board and ceo Howard Levine during the company's second-quarter earnings call last week.

Enhanced food assortments, expansion of the urban store initiative and continued focus on its “treasure hunt” merchandise strategy will be key this fiscal year, he noted.

The 6,002-unit discount chain experienced favorable sales trends in the home area by virtue of its opportunistic assortments and the use of “a limited number” of circulars to highlight treasure hunt goods.

In its urban initiative program, Family Dollar is expecting to see improvements based on significant strategic investments made toward it last year.

This year the focus for this strategy is on three goals: improving financial returns, reducing shrink and improving store management retention.

“Last quarter we indicated that 80% of stores in the program generated better profit than in the first quarter of 2005, and that about 60% generated better profit margins,” Levine said.

“In the second quarter, comp stores in the urban initiative continued to produce mid-single digit sales increases and the profitability trends have continued.”