Consolidated eyes national presence
December 31, 1969-- Home Textiles Today,
NEW YORK — Consolidated Stores is consolidating its focus as it strives to solidify its nationwide status within five years.
Speaking to analysts at last week's Banc of America Consumer Conference, Consolidated's chairman and ceo Mike Potter outlined the company's initiatives as it moves from a "buy-side focus" to a "customer focus."
The first step was to build its brand, he said; and — as the company announced in March — it will switch the names of its separate divisions — Big Lots, Odd Lots, Pic 'n' Save and MacFrugal's — all to Big Lots, its most recognized brand. This move will cost the company approximately $13.2 million, though that number could have easily tripled had it switched to one of the other brand names or a new name altogether. Consolidated also divested itself of K•B Toys to concentrate fully on the close-out sector.
Under one brand name, the company can better spread the word nationwide. "We will blanket the country with national TV coverage within five years," he said, instead of relying on circulars. "We were heavily circular-based in the past," he said, and they help drive traffic. But circulars have diminishing returns, require a big commitment in product, he said, and they don't go to new customers, which the TV ads will. And using both television ads and circulars combined will bring a 32 percent increase in households, as well as an 83 percent gain in impressions, he said.
Potter also discussed the three types of customers which typically shop Consolidated Stores. The majority of consumers he called the "entry price point customers," who are not brand sensitive. Thirty-one percent of its customers are "mart shoppers," and have more money to spend and prefer branded products. Sixteen percent of customers have a lot more disposable income, but enjoy shopping for deals. All three profiles have opportunity for growth, he said, but the latter two will "raise the basket opportunities."
Consolidated is in a unique position, Potter said, sandwiched between the dollar and discount stores. While dollar stores are typically 15,000 square feet and discounters 80,000 to 100,000 square feet and sometimes bigger, Consolidated Stores are about 25,000 to 30,000 square feet, he said.
With a product mix focusing on national brands, Consolidated buys from more than 3,000 manufacturers annually, with no single vendor holding more than 2.5 percent of the total product mix.
Domestics is about 6 to 8 percent of the product total, and consists mainly of comforters, sheet sets and sleep pillows.
Related Content By Author
Industry Related Content
More From the NY Market: It's All About Product!