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Retailers Becoming Grocery Stores???

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July 02, 2008 – Comments (0)

Family Dollar:

 “Our investments in key consumable areas are providing customers with great values on the basic items they need every day, and our small, neighborhood stores are very convenient for customers in this environment of rising gasoline prices.”

While the federal stimulus package is expected to benefit the Company’s target customer in the fourth quarter, predicting the magnitude of the impact is difficult. Month-to-date, sales are above the Company’s original plan, and comparable store sales for the June period are now expected to increase approximately 6%. For the fourth quarter of fiscal 2008, the Company believes that comparable store sales will increase 4% to 6% compared with the fourth quarter of fiscal 2007. The Company anticipates that sales of consumables will continue to drive comparable store sales increases......

 

Walgreens:

June front-end sales were helped in part by strong sales of promotional products, consumables and gift cards.

 

In a world where retailers are scrambling to generate sales....selling groceries and gas is a sure fire way to get customers in the door.  The problem is that grocery prices are rising at double digit rates and retail growth is not staying even close.  Further, groceries are a low margin item.

It is interesting when you walk into a Walgreens or Family Dollar how much shelf space is devoted to groceries and everyday items....I wonder if this is affecting grocery and convenience stores?

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