Family Dollar Branches Into Beer and Wine

Strong sales at Family Dollar test markets lead to nationwide expansion of beer and wine sales.

July 11, 2014

MATTHEWS, N.C. – The economy remains brutal on Family Dollar’s core customers who have been making fewer trips and spending less money at the chain. To offset this trend, Family Dollar has been stocking up on grocery items to spur more trips, which, in turn, is expected to boost overall average sales ticket per trip as people tend to grab a few extra items.

According to a report in BusinessWeek, Family Dollar has been experimenting with alcohol sales at about 200 stores this summer, and the results have been strong enough for a nationwide expansion of beer and wine sales. Family Dollar’s entry into beer and wine sales follows similar moves by dollar store chains such as Dollar General and 99 Cents Only.

Family Dollar announced the expanded alcohol strategy this week after reporting another weak sales quarter. The retailer is hoping that more grocery items will prompt more customer trips to the stores and “resurrect a flagging business with profit margins that have been sliding steadily for three years,” writes the news source.

“I will tell you that our observations are that it’s still pretty tough out there,” Family Dollar Chief Executive Howard Levine told analyst, according to BusinessWeek. “The low-end consumer has not benefited from this recovery at all and I think has even slipped back.” He cited high winter heating bills from the past winter — an abnormally cold season practically everywhere — as hitting low-income Americans particularly hard.

Family Dollar forecast another slow quarter this summer, with flat sales. The company plans to close about 5% of its locations — or 370 underperforming stores. At the same time, it is also adding about 400 brand-name items, mostly food, in stores to help drive traffic, along with beer as another strong lure for shoppers.

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