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Branded-to-generic shift impacts Fred’s September comps

BY Michael Johnsen

MEMPHIS, Tenn. — Fred’s posted a 1% gain in sales, to $17.5 million, for the five weeks ended Oct. 1.

Comparable store sales for September increased 1.1%; comparable store sales were flat in the year-earlier month. The September total sales comparison was adversely affected by store-closing sales that occurred last year during the month.

"Our general merchandise departments performed well during September, highlighted by the strength of our Core 5 Pet and Household Supplies areas, as well as other consumable departments," Fred’s CEO Bruce Efird said. "Sales for the month were within our projections as strong customer traffic offset a lower average customer ticket. The ongoing brand-to-generic shift within the pharmacy department, however, continued to affect comparable store sales. Additionally, the timing of Social Security payments resulted in a sales shift from September to October. With sales for the first two months of the third quarter tracking within the projected range, we remain confident with our forecasted earnings for the quarter."

Fred’s total sales for the year-to-date period increased 2% to $1.2 billion. On a comparable-store basis, year-to-date sales increased 0.6%, versus an increase of 2.3% for the same period last year.

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Target shoppers spent money in September

BY Mike Troy

MINNEAPOLIS — Target reported a moderately better-than-expected 5.3% same-store sales increase for September that was driven by broad-based gains in all categories and geographic regions, the company reported Thursday. The increase was almost entirely due to larger average transaction sizes and came on top of a prior year increase of 1.3%. The company also noted that customer traffic as measured by comparable-store transaction increase a little more than 1%.

“We’re very pleased with our September comparable-store sales, which were somewhat ahead of our expectations,” Target chairman, president and CEO Gregg Steinhafel said. “We experienced strong sales results throughout the month and across a broad array of merchandise categories, demonstrating Target’s ability to deliver on both sides of our ‘Expect More. Pay Less’ brand promise and generate strong financial performance even in this soft economic environment.”

As has been the case throughout the year, September comps in food increased in the mid teens and comps in the household essentials area also were up more than the company average. The beauty category led the way and experienced a high single-digit increase, while comps in apparel and accessories were up more than the company average. Double-digit increases were reported in the intimate, hosiery and performance apparel segments followed by a high single-digit increase in kids’ apparel. Jewelry and accessories were the weakest performers.

In the hardlines area, comps decreased in the low single-digit range, with the strongest performance in toys and the softest performance in electronics. Comps in home furnishings and décor increase in the low single-digit range, led by a mid single-digit increase in domestics, with the softest performance in decorative home area.

Aside from the solid overall 5.3% gain, Target has to feel good that every region of the country reported a healthy increase in comps and that inventory levels were described to be in very good condition. For the October reporting period, the company is expecting more of the same with a forecast calling for a comps increase in the low to mid single-digit range.

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Harris Teeter partners with D.C. councilmember on $10K donation

BY Michael Johnsen

CHARLOTTE, N.C. — Harris Teeter and Washington, D.C., Ward 6 council member Tommy Wells joined forces Thursday to offer a $10,000 donation to Jan’s Tutoring House, a nonprofit organization in Washington, D.C., that pairs children with volunteers who provide one-on-one tutoring and mentoring.

Wells has won support throughout Ward 6 and Washington, D.C., for forging public, private partnerships to translate ideas into real improvements for Ward 6 residents and beyond. He began volunteering at JTH in 1997 and recognized Harris Teeter as a likely partner because of the company’s commitment to providing educational opportunities to children through its Together in Education program.

Since 1998, Harris Teeter has donated more than $15.6 million to schools in its communities through Together in Education and more than $1.5 million to schools in northern Virginia, including Washington, D.C.

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