FOOD BOOSTS COMP-STORE SALES AT FAMILY DOLLAR

MATTHEWS, N.C. - The installation of refrigerated coolers selling food at Family Dollar stores here helped the retailer post comparable-store sales growth of 3% during its fiscal first quarter ended Nov. 26.

stores with coolers exceeded the overall average. Family Dollar added 400 stores during the quarter, bringing the total to 1,400 of the company's 5,900 stores. Levine said Family Dollar would add coolers to around 2,100 stores during the fiscal year.

"[Consumables are] an extremely important part of our business," Levine said. "The addition of the coolers to our stores is an area that has brought more consumable sales to us, as we've seen basket size increase as a result of those cooler stores, and we continue to believe that that will be an important part of our comp-store growth over the next year.

"Hopefully in the near future - over the next couple of years - we'll be able to complete the chain rollout of coolers. We're also looking to see how we can better leverage that traffic and have a more complete food assortment to take advantage of some of the traffic that we are getting out of our cooler program."

Levine said the company was working on "a number of things" in enhancing its food merchandising, but said it was too soon to discuss the plans in more detail.

"We have a pretty limited food assortment today," he said. "There are opportunities to further grow that to drive traffic in our stores as we are driving traffic through the addition of the cooler program. So consumables will continue to grow as a percent of our sales as they are having a stronger comp increase than some of the other areas, so that alone will increase the amount of consumables that we are selling today."

Quarterly profits were down 5.5% to $51.4 million, compared with year-ago results, on sales of $1.5 billion, a 9.1% increase.

During the first quarter, the company opened 73 new stores and closed 19.

For the fiscal year ending Aug. 26, Family Dollar expects comp-store sales to rise 2% to 4%, but margins will be pressured by fuel costs and the shift toward lower-margin consumables.