Fred's own brands contribute to 'sequential improvement' across FE

MEMPHIS, Tenn. — If and when Fred's adds as many as 1,200 Rite Aid locations into its mix in the coming month, the retailer will be well along a legacy store transformation across that front-end that at its core features a focus on own brand. So far, that transformation has resulted in two consecutive quarters of sequential improvement in performance excluding non-operating items, the company reported.

"We are very encouraged by the positive comp sales we saw in our general merchandise division in the quarter," Mike Bloom, CEO Fred's, told analysts during the company's first-quarter conference call. "We remain focused on implementing a number of growth initiatives in order to deliver sales and margin improvement in the front store. These include pricing optimization across the entire store with a focus on enhancing our own brand pricing strategy; assortment upgrades replacing slow moving products with new to Fred’s products in both national brand and own brand that are top sellers in our markets which are currently not carried in our stores; [and] improving out of stocks by leveraging our new JDA replenishment allocation system to raise service levels on key items and ensure availability at shelf."

In addition, Fred's has unveiled a new program for the company's top 200 items with the goal of always being in stock.

"All of these initiatives are supported by a consumer insight study, which has provided greater visibility into the drivers of Fred’s Pharmacy brand," Bloom said.  "This study has allowed us to understand the competitive strengths of Fred’s, as well as the opportunities we have to add value and reach our customers more effectively."

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