Family Dollar Stores, the US discount retailer thriving in the recession, will continue to prosper when the economy recovers, the company’s chief executive said today (8 April).
The company, which has over 6,400 outlets in the US, upped its annual profit forecast for the second time this year as shoppers continued to flock to its stores.
Family Dollar has benefited as US shoppers look for value during the country’s economic problems but CEO Howard Levine insisted the company’s popularity will persist when the economy improves.
“We’ve gotten some trade down from middle-income customers but most of our growth comes from our core customer,” Levine told analysts.
“As the economy improves, I believe a lot of that trade-down custom will stick. A good part of the increased [footfall] is that we are performing better. As the economy improves, I believe our operating performance will improve.”
Family Dollar has given more store space to “consumables” – lines including food and household products – which have seen sales grow, while demand for more expensive products has slowed.
Food, which includes own-label and branded lines from the likes of Kellogg, make up just under 20% of Family Dollar’s turnover, a spokesman for the company told just-food.
The retailer, which has stores in 44 US states, is looking to refurbish selected outlets this summer to reflect growing demand for its consumables products. Consumables account for 61% of Family Dollar’s revenues.
Earlier today, Family Dollar said second-quarter net income jumped by a third in the three months to the end of February. The company also raised its outlook for earnings per share and for sales for fiscal 2009.
Family Dollar shares were up 4.75% at US$34.21 at 11:20 EST this morning.