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Family Dollar Chief Financial Officer Mary Winston this week told an audience at the Barclay’s Americas Select Franchise Conference that private label and global sourcing were being used to drive gross margin at the dollar store chain.
Winston said private label consumables sales rose 16 percent last year, remaining on track to reach $2 billion in sales by 2015.
“We have invested significantly in our private brand organization and capabilities over the last three years,” she said, according to transcripts of the event by Seeking Alpha. “As a result, we have significantly improved our merchandise quality and have more than doubled our assortment of private brand consumables.”
She added that 30 percent of the company’s products were manufactured outside of the U.S., with the company mostly using agents and domestic importers to bring those products to shelves.
“We believe that we have a significant opportunity to reduce our cost by expanding our direct-to-factory purchases,” she said, according to the Seeking Alpha transcripts. “At the end of last year, about 4 percent of our total purchases came directly from overseas factories. We believe we can increase that penetration to 13 percent by 2015 and expect this to result in significant savings as we move to a more efficient, direct model.”