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Big Lots Says Food Test Is Positive

May 31, 2013

Announcing quarterly earnings this week, discount retailer Big Lots said that its first tests with coolers and freezers in stores has “been encouraging.”

Big Lots announced on its fourth quarter earnings call for 2012 that it would test the format in 75 stores in five markets, offering convenience items such as milk, eggs, cheese and meat along with branded frozen foods.

Executive Vice President Chuck Haubiel updated analysts on a conference call on the early results.

“The goal of the test was to offer an expanded assortment of food-related items in classifications of merchandise, which would position us towards becoming SNAP-eligible,” Haubiel said, according to transcripts of the call from Seeking Alpha. “We believe this could provide higher traffic to our stores given, today, our inability to accept this form of tender, which could be a barrier for entry for customers who would prefer to shop our stores. All 75 stores are fully merchandised with fresh product, and over the last couple of months, our current customer response has been encouraging.”

Haubiel said the products that were moved out to make way for the coolers had minimal impact on the 75 stores’ sales, and stores began accepting SNAP benefits as recently as last week, “which is designed to encourage customer traffic, which will ultimately determine the success of this test.”

The foods are being stocked by a third-party provider, Haubiel said.