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Family Dollar sets sights on home to appeal to better-income shoppers

New York – Discount chain Family Dollar is refining its discretionary offerings, including its home assortment, to hang on to a growing roster of better-income shoppers.

Howard Levine, chairman and ceo, told analysts during his presentation at Barclays Capital Retail and Restaurants Conference today that chain is “increasing our investments to broaden the appeal of our assortments, improve the in-store shopping experience, and increase the effectiveness of our workforce” in an effort to expand its share of the market.

But before making these investments, Family Dollar got to work “understanding our customer,” he explained. This core customer is a woman in her mid-40s, has an established family and lives on less than $40,000 a year.

But today about one-third of Family Dollar’s shoppers fall into a different demographic.

“Customers making more than $40,000 a year are increasing as a percentage of new sales,” he noted. “This middle income customer is shopping us more frequently. In the past, she might have relied on us for a gift for a child’s birthday party for some inexpensive holiday decorations. Today she depends on us for great value on the brands that she trusts. We have made progress in broadening our customer base. But I believe that we have an opportunity to further expand our market share.”

Other initiatives in place include “becoming more relevant to our customers in discretionary areas,” Levine continued. “Our second quarter sales results, especially in toys, seasonal and home, reflect our progress in this area.”

While Family Dollar expects its growing consumables business to continue to increase as a percentage of sales, “we believe that the investments we are making to enhance our capabilities in pricing, global sourcing and private label will enable us to expand gross margin.”

 

 

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