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After reporting another record first quarter, Dollar Tree CEO Bob Sasser discussed the changes the retailer has implemented in its front end and impulse sections after Easter.
Dollar Tree’s same-store sales rose 2.1 percent in the first quarter of 2013 from a year ago, but total sales rose 8.3 percent to $1.87 billion, a record for the company’s first quarter. Its operating margin rose 70 basis points, another first-quarter record, and earnings per share climbed 18 percent to 59 cents a share, yet another record for the first quarter.
After Easter, Dollar Tree re-merchandised its checkout lanes, Sasser told analysts on a conference call, according to transcripts of the call from Seeking Alpha. Although some of the physical changes to the areas had been made at the end of 2012 with existing merchandise, Sasser said that a buying trip from July brought entirely new merchandise to the front end that was rolled out after Easter.
“We added a trend fixture to the front. A trend fixture is ever-changing, it's new product, it's fun product, it's impulse product,” Sasser said, according to the Seeking Alpha transcripts. “Some of it's kiddie candy, some of it is stationery, some of it is from toys, some of it's from all over the store. But it's trending and it's new and it's fresh and it really engages the customer and invites them to buy one more item to put in their basket.
“Then the new checkout assortment that we have, everything has a home on the checkout. We've bought for it, it's all new merchandise, it's not the same SKUs, it's new product. Some of it is similar, but it's all new. And it's laid out in a fashion that's easier to shop and more engaging. We have made a spot on our checkouts now for our drive item, which is the item that our cashiers are selling to our customers or suggesting to our customers each week. … So a lot of changes, a lot of new product.”
And after the first six weeks, Sasser said the response was encouraging.
“So that was all done right after Easter this year, in April. And the new assortment is out there,” Sasser said. “Customer response has been terrific. It's doing all of those things that I just said, frankly. It's early in the year, but it is accomplishing all the things that we talked about. So I'm really pleased with that. Merchandise margin is good on the front-end, it's a better shopping experience, and helping us drive some of that variety sales.”