Fred’s reports slight February gains despite economic headwinds
MEMPHIS, Tenn. — Fred’s Super Dollar on Thursday reported total sales of $159.2 million for the four weeks ended March 2, up some $200,000 from the corresponding year-ago period. Comparable store sales for the month declined 1.5%.
"Considering current economic headwinds, including delays encountered with processing tax returns and refunds as well as increased payroll taxes, we were pleased that February sales were within our projected range for the month," stated Bruce Efird, Fred’s CEO. "General merchandise comparable store sales were positive for the second consecutive month, reflecting good momentum in new initiatives such as an expanded offering in auto/hardware and our discount tobacco shop. We also saw a solid start to our new spring layaway program, and while sales under this program are deferred until final payments are made and therefore not included in February, they would have added 60 basis points to the month’s total and comparable store sales," he said. "In the pharmacy department, positive script growth continued, but as in previous months, top-line sales were negatively affected by the ongoing brand-to-generic shift. The effect of this shift on total and comparable store sales was 280 basis points in February."
Because of the combination of fourth quarter promotional markdowns on basic and consumable products, as well as year-end adjustments relating to higher-than-anticipated insurance and other operating costs, Fred’s reduced its financial guidance for the fourth quarter of 2012. Fred’s now expects to report earnings in the range of $0.16 to $0.21 per share for the fourth quarter.
During February, Fred’s opened one new store and pharmacy location.
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Target, Fast Company sponsor mobile-development competition
NEW YORK — Fast Company magazine and Target are sponsoring a competition to develop a new mobile experience for Target, with a grand prize of $75,000.
The Co.Labs and Target Retail Accelerator is a competition to create either a mobile app or a mobile-enabled website design for the retailer, taking places at the Fast Co. Grill in Austin, Texas, blocks away from the SXSW conference. Entries will be accepted between this Friday and April 30, and seven finalists will be selected in May and awarded $10,000 to develop their prototypes.
"Innovation is core to Target’s culture and strategy, and we are always looking for new ideas to enhance the shopping experience for our guests," Target president for multichannel and SVP enterprise strategy Casey Carl said. "We’re proud to partner with an innovative publication like Fast Company, and we can’t wait to see what the developer community brings to the table through the Retail Accelerator."
Costco backs minimum wage increase
WASHINGTON — Club retailer Costco Wholesale is throwing its support behind a bill introduced in Congress Tuesday to raise the federal minimum wage.
Business for a Minimum Wage, a Washington-based nonprofit group, said that Issaquah, Wash.-based Costco was among the many companies and other businesses that supported the increase. The Fair Minimum Wage Act of 2013, introduced by Sen. Tom Harkin, D-Iowa, and Rep. George Miller, D-Calif., would raise the federal minimum wage from its current $7.25 per hour to $10.10 and provide annual increases linked to increases in the cost of living.
"At Costco, we know that paying employees good wages makes good sense for business," Costco president and CEO Craig Jelinek said in a statement on behalf of the nonprofit group. "We pay a starting hourly wage of $11.50 in all states where we do business, and we are still able to keep our overhead costs low. An important reason for the success of Costco’s business model is the attraction and retention of great employees. Instead of minimizing wages, we know it’s a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty. We support efforts to increase the federal minimum wage."