• Andrea Lillo

Family Dollar touts store improvements

Matthews, N.C. - Family Dollar talked up its new store renovations designed to "appeal to our core customers while not alienating new ones."

During Family Dollar's presentation at Barclays Capital's2011 Retail and Restaurants Conference this week in New York City, the company's chairman and ceo, Howard Levine, discussed recent and ongoing efforts to improve store layout, merchandise mix and real estate locations are better serving its existing lower-income shopper while increasingly attracting a new middle-income set of customers.

Levine noted: "While our core customer continues to account for about two-thirds of sales, we are seeing a more middle-income customer shopping more often at Family Dollar."

The 6,800-plus retailer's traditional core customer is a female head-of-household who lives paycheck to paycheck, earns an annual income of less than $40,000, has a high school degree or less and in some cases receives government benefits.

But recently, Levine, said, "we've seen a new, higher-income customer coming to Family Dollar attracted by the value and convenience we offer. We know we have an opportunity to appeal to that new shopper in addition to capturing the growing population of aging baby boomers and Hispanics."

He said the effort to better pursue these new customers began about 18 months ago, when Family Dollar started developing larger plans to reaccelerate new store growth, drive stronger comp store growth, and expand operating margin.

These store renovations "are an important program for the company and we're spending more than we ever have," from about $100,000 to $130,000 per store, which Levine said is "about three to four times more than our historical average."

New store openings are also part of the effort. After opening 200 new units last year, Family Dollar is scheduling another 300 new stores this year as well as renovating more than 800 existing sites.

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