Private Label Buyer

Fred’s Adding More Private Label SKUs

May 31, 2013

After a sluggish first quarter of fiscal 2013, Fred’s discount retailer announced that it was committed to its private label, with new items headed to stores in the second quarter.

Same-store sales fell 1.3 percent from a year earlier, with total sales up 0.2 percent from a year ago. Fred’s is in the middle of reconfigurations in its pharmacies and general merchandise areas, as well as replacing and expanding its cooler program in the top 100 stores.

Fred’s operates 715 stores, with 349 pharmacies.

“We continue a number of initiatives to drive margin. Certainly, one of them is continuation with our sourcing that we talked about in the past,” Chief Merchandising Officer Alan Crockett told analysts on a conference call, according to transcripts of the call from Seeking Alpha. “Our own brand, obviously, is still a very key focus for us and in the second quarter we have about 25 additional new own brand items coming online. Our pricing technology, we've garnered benefits from that and we are continuing to expand that and we'll continue to do that for the balance of the year.”

Crockett said the cooler expansion brought about 20 to 30 new products into stores, expanding the variety of refrigerated and frozen consumables available to customers. That helped drive strong sales in consumables, also boosted by a good quarter for health and beauty care products and paper products, he told analysts.

The general merchandise reconfiguration in 2013 is planned to expand auto and hardware departments along with seasonal products. It also will add health and beauty care products in stores with pharmacies.

“As of today, we have reconfigured an additional 101 stores with our expanded hometown and automotive and hardware, bringing the total number of stores to 175,” Crockett said, according to the Seeking Alpha transcripts. “We are pleased with the results of the 175 stores … with automotive and hardware comparable store sales increase of 15 percent and 43 percent, respectively.”