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Family Dollar Sees Private Label Opportunity

Family Dollar Stores is looking to increase its private-label penetration, particularly around food and other consumables, officials said during an investor presentation.

MATTHEWS, N.C. — Family Dollar Stores here is looking to increase its private-label penetration, particularly around food and other consumables, officials said during an investor presentation Wednesday.

Kenneth Smith, Family Dollar's chief financial officer, said the company sees an opportunity to increase consumable private-label sales from current levels of 10% of sales to 15% to 20%. Storewide, Smith said Family Dollar plans to increase private brand penetration from its current 19% level to 25% penetration.

The emphasis on private label was among several initiatives to grow earnings Smith detailed during a presentation at the Deutsche Bank Small and Mid Cap Conference in Naples, Fla. Smith also said the chain would look to serve the small but growing group of shoppers it draws with annual incomes above $40,000.

"It’s really exciting for us to serve that core lower-income customer, as well as a slightly higher income customer," Smith said. "We understand the nuances between the two and the different shopping patterns and serve those customers."

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