To generate incremental sales,
Big Lots Inc.
) has revamped its food department by giving it a fresh look along
with adding more brands to its food assortment in order to make
shopping convenient for its customers.
Racks across Big Lots' 1,491 stores will showcase popular brands
Miracle Whip A.1.,
MIKE & IKE, Nutella,
Macaroni & Cheese
Velveeta, Smucker's, Duncan Hines and Pillsbury
, at compelling prices.
In addition, the Broadline closeout retailer has laid special
emphasis on its international food business,
, which has grown considerably over time. Responding to the demands
will now comprise selected food brands of the loved European,
Hispanic and Asian cuisines.
After a mediocre financial run and dismal Canadian foray, Big Lots
has launched a powerful turnaround strategy to reinstate itself on
the growth trajectory. In addition to the broader "Edit to Amplify"
initiative, management is paying special attention to furniture and
food, and consumable categories as both continue to gain traction.
Pulling back from the unprofitable Canadian operations was a
brilliant move as it now allows full focus on domestic operations.
Food and consumable category has displayed strong same-store sales
up in double digits for the first quarter and mid single-digits for
the last two quarters of fiscal 2013, making it a profitable
avenue. Therefore, the company has been actively rolling out
cooler/freezer to expand merchandise of food-related items with an
aim to target food stamp recipients. To benefit from the holiday
season, it intends to cover 600 stores before the fourth quarter of
fiscal 2014, bringing the total number of stores with
cooler/freezer capacity to 725.
Moreover, to keep up with changing trends, Big Lots is laying
emphasis on developing its e-Commerce/omnichannel capabilities. The
company, which competes with Burlington Stores, Inc. (
), Dollar Tree, Inc. (
) and Costco Wholesale Corp. (
), is likely to invest nearly $15 million of capital toward
e-Commerce development and it is likely to be operational sometime
in fiscal 2015.
Though the company's efforts are in the right direction, sluggish
discretionary sales might slow down the turnaround process.
This Zacks Rank #3 (Hold) stock is expected to reports its
second-quarter earnings on Aug 25, 2014.
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