Family Dollar stores ramping up

Jennifer Collins Sep 28, 2011

Family Dollar stores ramping up

Jennifer Collins Sep 28, 2011

Kai Ryssdal: You want a sign the low end of the retail economy’s doing all right for itself? Try this one on.

The Family Dollar chain reported record fourth quarter sales this morning: an 8 percent jump in profit. And it’s going to open maybe 500 more stores in the coming year.

Marketplace’s Jennifer Collins explains how Family Dollar has set itself apart from all its 99 Cent cousins.

Jennifer Collins: Walk into almost any 99 Cent retailer and this is what you’ll find:

Anthony Chukumba: A lot of them tend to be pretty sloppy.

Anthony Chukumba is an analyst with BB&T Captial Markets.

Chukumba: A lot of out-of-stocks, so you’re not sure what you’re going to get on any given day.

Prices at stores like Dollar General or Dollar Tree have pulled customers away from Walmart, whose U.S. sales have been soft for several months. Bruce Cohen is a retail strategist at Kurt Salmon.

Cohen: Consumers are always looking for a great deal and now more than ever.

But the Walmart shopper is used to stopping by a superstore and always finding things like milk. So Anthony Chukumba says Family Dollar is making sure customers come back by re-stocking the necessities. In addition to those treasure hunt items like the hula skirt in December, regular items now include shampoo, cereal and dish soap.

Chukumba: They’re really trying to improve the shopping experience for the customer and I think that’s something that particularly resonates with these trade-down customers.

Who are looking for even better deals than Walmart can provide. But customers also want a nice shopping experience, so Family Dollar is remodeling stores and promoting them like this.

Ad: New Family Dollar stores feature bright new colors, clear convenient signs and a larger assortment of products than ever.

And with more stores opening next year, analysts expect this new recipe to work.

I’m Jennifer Collins for Marketplace.

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