Q1 sales up, comps down at Family Dollar as dollar store chain announces two management changes
MATTHEWS, N.C. — Family Dollar reported sales of $2.5 billion in first quarter 2014, a 3.2% increase over the same period last year, the dollar store chain said Thursday.
For the 13-week quarter that ended Nov. 30, the chain said sales were strongest in refrigerated and frozen food, health aids and tobacco. Same-store sales during the quarter decreased by 2.8% due to fewer customer transactions and a slight decrease in average customer transaction value.
"Today, we reported sales and earnings for the first quarter of fiscal 2014 ghat were in-line with our previously provided guidance," chairman and CEO Howard Levine said. "As expected, comparable store sales were pressured, as we anniversaried strong consumable sales growth last year. In addition, our core customers continued to face economic uncertainties, and the promotional environment intensified."
Profit for the quarter was $78 million, compared with $80.3 million in first quarter 2013. The chain opened 126 new stores, closed one and renovated, relocated or expanded 179, for a total store count of 8,041. The company expects its second quarter 2014 comps to experience a decline in the low-single-digit range.
In addition, the company announced two major management changes Thursday, including the departure of president and COO Mike Bloom and the promotion of Jason Reiser to EVP and chief merchandising officer.
Supervalu commits to fixing retail banners, reports positive IDs for Save-A-Lot
MINNEAPOLIS — While Save-A-Lot is still the jewel in the crown of Supervalu, the chain has committed to investing into its retail supermarket banners with a makeover for all of the banners, a review of the planograms within those banners and private label.
"We will launch shortly rebranding campaigns in all of our retail banners, where our customer messaging has been disjointed and oftentimes confusing," Sam Duncan, Supervalu president and CEO, told analysts Thursday morning. "When complete, these banners will have a much more clearly defined identity, which we will be communicating across all platforms, including in-store signage, weekly ads, customer emails, mobile devices and banner web pages."
For an example as to how Supervalu will be rebranding its respective banners, Duncan directed analysts to the Shop’n Save web site.
There’s much work to be done in turing around the supermarket banners, Duncan acknowledged. "In some of our banners, the store layouts are still [reflective of] the 80s and 90s where center store was more of a focus," he said. "We are going to focus on fixing the sales of that retail side of our company."
A review of the company’s planograms revealed some categories in which Supervalu was not well represented. "As our merchandising teams have reviewed our category sets and space allocation, it became quite clear that we have a number of areas where we do not have enough linear feet devoted to the assortment, meaning key items are missing from our shelves," Duncan said. "Two categories we are addressing now are pet and baby."
And the continued improvement in private label penetration also will be a focus going forward. "We are running ahead of our internal sales penetration goals," Duncan said. "Our private brand sales penetration has increased 75 basis points on a year-to-date basis compared to last year. And we know we still have a significant opportunity in front of us," he said.
"This past year has been about reorganizing and [navigating] new directions for our company, stabilizing and decentralizing," Duncan said. "We had to establish a new management team, not only in part of our retail banners but also our head office," he said. "We still have to work to do on the retail banners. We just recently got the org charts filled. … This will be a multi-year project."
Supervalu reported third quarter fiscal 2014 net sales of $4 billion, representing a decrease of 1%, and net earnings of $31 million, or $0.12 per diluted share.
Identical store sales in the Retail Food segment were negative 1.9%. Third quarter Retail Food net sales were $1.1 billion, a decline of 2.6%.
Retail Food operating earnings in the third quarter were $24 million, or 2.2% of net sales, and included $1 million in pre-tax income related to a reduction of previously accrued severance costs. When adjusted for this item, Retail Food operating earnings in the third quarter were $23 million, or 2.2 percent of net sales.
Third quarter Save-A-Lot net sales were $991 million, an increase of 2.6%, reflecting the impact from network identical store sales of positive 1.7%. Identical store sales for corporate stores within the Save-A-Lot network were positive 5.4%.
Family Dollar elevates Jason Reiser to chief merchandising officer; president and COO Michael Bloom departs
MATTHEWS, N.C. — Family Dollar Stores on Thursday announced that it has promoted Jason Reiser to the position of EVP – chief merchandising officer. Reiser will report to Howard Levine, chairman and CEO.
The company also noted that president and COO Michael Bloom has left the company to pursue other interests. The company will conduct a search for a new president and COO.
Reiser will have executive responsibility for the company’s merchandising, global sourcing, marketing, replenishment and financial planning teams. Reiser joined Family Dollar in July 2013 as SVP merchandising with responsibility for the company’s health, beauty, personal care and household product teams.
In October 2013, Reiser was promoted to lead merchandising officer with responsibility for all merchandising functions.
Reiser joined Family Dollar after a 17-year career with Walmart Stores in a variety of roles, most recently serving as VP merchandising, health and family care for Sam’s Club.
Reiser holds a Bachelor of Science degree in Pharmacy from Northeastern University.