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MATTHEWS, N.C. -- Family Dollar Stores Inc. announced it will sell beer and wine nationwide. The convenience store competitor has been testing alcohol sales at 200 stores during this summer, and has been pleased enough with the results to scale up the project.
Although beer and wine sales carry slim margins, Family Dollar needs a way to draw more customers to its stores, reported Bloomberg Businessweek. The company's latest quarterly earnings, reported July 10, were below predictions of Wall Street analysts, with sales dropping 1.8 percent year over year.
The economy has picked up for many U.S. consumers, but not for those considered to be lower income classes, Family Dollar revealed. Beer and wine sales can help prevent what the company calls "trip consolidation," whereas Family Dollar customers make fewer trips to its stores.
“Our observations are that it’s still pretty tough out there,” Family Dollar CEO Howard Levine told analysts. “The low-end consumer has not benefited from this recovery at all, and I think has even slipped back.”
Levine cited high heating bills from the past winter as hitting low-income Americans particularly hard, the news source reported.
Executives at Matthews-based Family Dollar believe beer and wine sales are keys to getting customers to return more often to its stores. The company has been under pressure recently to boost earnings, with activist investor Carl Icahn going as far as saying Family Dollar should be sold.