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Family Dollar to Add 100 New Private Label Food Items & HBC PL Line

January 10, 2012
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Food has become a major reason consumers go to dollar stores and Family Dollar Stores, Inc. wants to give them more reasons to pick one of its outlets for that next quick trip. The Matthews, N.C.-based retailer plans to add 100 new private label food items this quarter as part of a ramp-up of 300 total new food items in its stores, CEO Howard R. Levine told security analysts in an earnings call Jan. 6. A new HBC private, Family Wellness, label is in the works, he said.

 

“Food continues to be a significant trip driver. Through our renovation initiative, we have significantly expanded our assortment of food. Last spring, we incorporated a number of these new items in existing stores that had not been renovated, and our customers have responded well,” Levine told analysts. “This quarter, we will add 300 new food items in all stores, including about 100 new private brand items. These additions will position us to capture more trips and reinforce our value proposition.”

 

Family Dollar also will add a new private label in the health and beauty care space, Family Wellness, he said. “We will launch our Family Wellness brand to provide our customers with quality over-the-counter merchandise at great values,” Levine told analysts.

 

Expanding its private label offerings will help Family Dollar to cope with rising fuel costs, he noted.

 

“Private brands and food will be an important part of our assortment, and I would add in the HBA areas, the new name, Family Wellness, you'll begin to see in our stores in the very near future,” Levine said. In response to a question on private label penetration rates, he outlined that “at the end of last year, our total private brand penetration was about 25 percent. On consumables, it was about 16 percent. In the first quarter, we continued to see great growth in private brands. I think something like 16 percent or 17 percent growth in consumable private brands in the first quarter. So that trajectory is continuing. As I think we've said on past calls, our goal is -- our near-term goal is to get penetration of consumable private brands up to 20 percent, and we are certainly well on our way.”

 

Family Dollar reported net income of $80.4 million compared with net income of $74.3 million for the first quarter of fiscal 2011. Sales for the quarter reached $2.1 billion compared to roughly $2 billion in the first quarter of fiscal 2011.

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