FORT WASHINGTON, Pa. — Nutrisystem executives on Wednesday told analysts they were bullish around expanding their weight-loss meal delivery service into mass retail through its partnership with Walmart. Initially beginning with 500 Walmart doors in January, the company recently expanded the offering to 2,000 stores and climbing.
"Because of our initial success, we’ve now expanded … and expect to continue to expand throughout 2013," Dawn Zier, president and CEO, told analysts during the company's 2013 first-quarter conference call.
But this isn't the first time Nutrisystem has tried to crack the retail code with its weight loss offering — the company launched a retail product across more than 2,000 Kroger shelves last year that generated somewhat less fanfare.
However, Nutrisystem is taking a different approach to its retail offering this time around with a trial offering emphasizing weight loss as opposed to a maintenance program designed to sustain pursuit of a healthier lifestyle.
"Kroger itself was not a bad channel for us to be in," Zier said. "The issue is that we won some market in Kroger with the wrong product, doing the maintenance and within weight management products where we’re obviously finding our strength in the weight loss kit [at Walmart]."
Nutrisystem launched its 5-Day Jumpstart Your Weight Loss Kit exclusively at Walmart on April 22. "[This] represents a significant departure from our traditional 28-day program," Zier said. "We are experiencing very positive results from our Walmart retail lines that expanded our footprint in their stores," she added. "In addition to our core 5-Day Kit, our 'D' kit targeted to individuals with or without Type 2 diabetes is also performing well."
Nutrisystem's retail offering is now trial friendly, which may lead to more dieters signing on for Nutrisystem's more comprehensive maintenance program. "We’re seeing repeat business at Walmart as well as multiple kit purchases indicating that customers are seeing good results and listing other family members to diet with them. This is an early win for us in 2013," Zier said. "We are actively developing our retail product line and we expect to have additional product and kit to launch in retail for the 2014 diet season."
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