Private Brands Grow 23% at Family Dollar

Yesterday North Carolina based discount retailer Family Dollar held its Q2 2011 results – earnings transcript call with Kenneth Smith – Chief Financial Officer, Principal Accounting Officer and Senior Vice President, Kiley Rawlins – Vice President of Investor Relations & Communications, Howard Levine – Executive Chairman, Chief Executive Officer and Member of Equity Award Committee and R. Kelly – President and Chief Operating Officer presenting the retailers results. Over the last 18 months the executive team has repeatedly stressed the importance of their Private Brand portfolio strategy to their overall growth and profitability. Private Brands were mentioned no fewer than16 times in the call.

Most notable was the following two paragraphs:

Customers are beginning to feel the impact of rising commodity costs. Through our price management efforts, the continued development of our private brand portfolio and our global sourcing capabilities, we have maintained a strong price perception with customers. Through the first half of fiscal 2011, private brand sales increased approximately 23%. I’m especially pleased with the growth we have seen in our private brand consumables, which has increased about 29% so far this year. Importantly, the investments we have made to increase merchandising quality are delivering results. Recent customer surveys indicate that our quality perception for both national and private brands has improved.

Looking to the second half of fiscal 2011, we have some exciting new launches in our Apparel and Seasonal areas, as well as continued expansion of our Family Gourmet and Family Pet lines. To communicate our new private brands offerings, as well as our new consumable assortments, we are launching a number of in-store and direct marketing campaigns. In addition, we are increasing our targeted digital marketing efforts and executing more promotional events to leverage our growing customer traffic.

Responding to a question from analyst Scott Kaufman of Ross Kenneth Smith also stated:
Well, I think as Howard indicated in his remarks, we had very significant growth in our private brand area. Overall, for the first half of the year, private brand grew 23%. And if you focus on the core Consumable area, private brand growth was 29%. We’re investing aggressively in that area and are optimistic in terms of the growth for the remainder of the year.

Source: Seeking Alpha

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Christopher Durham is the president of My Private Brand and the co-founder of The Vertex Awards. He is a strategist, author, consultant and retailer who built brands at Delhaize-owned Food Lion, and lead strategy and brand development for Lowe’s Home Improvement. He has consulted with retailers around the world on their private brand portfolios including: Family Dollar, Petco, Staples, Office Depot, Best Buy, Metro (Canada), TLW (Taiwan) and Hola (Taiwan). Durham has published five definitive books on private brands, including his first book, Fifty2: The My Private Brand Project. In 2017, he will debut his newest book, Vanguard: Vintage Originals, a visual tour of innovation and disruption in private brand going back to the mid-1800’s. Dynamic in his presentation while down to earth and frank in his opinions, he has presented at numerous conferences, including FUSE, The Dieline Conference, Packaging that Sells, Omnishopper and PLMA’a annual trade show in Chicago. Durham lives in Charlotte, NC with his wife, Laraine, and two daughters, Olivia and Sarah.