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Promotion needed to build refill category

BY Doug Desjardins

The inkjet cartridge refill business is still relatively unknown and that’s why some high-profile retailers and suppliers are trying to get consumers in the habit of refilling cartridges instead of buying new ones.

Walgreens, which has the largest footprint in the refill business, promoted its service last month with a day of free refills on Sept. 12. The chain staged the promotion at 3,000 stores where the service is available and allowed customers to bring in one empty black or color cartridge to the photo counter for a free refill.

“It was an overwhelming success, to say the least,” said Walgreens spokeswoman Tiffani Bruce. “And for the most part, people who came in for the free service were refilling their cartridges for the first time, so it really helped us raise awareness.”

That fact alone made what was a costly promotion a success for Walgreens, which still is trying to promote a service that isn’t easy to merchandise. The chain first teamed with supplier TonerHead to roll out the refill stations to photo departments in the summer of 2006 and expanded them to more than 3,000 stores this year.

Walgreens typically charges $10 for a black cartridge refill and $15 for a color refill, about half the price of a replacement cartridge. The cartridges usually can be picked up within an hour. “For small business owners, students or anyone who prints a lot of documents or Web pages, the savings can add up fast,” said John Sugrue, Walgreens general merchandise manager for photofinishing.

To date, Walgreens is the only major drug retailer to roll out an inkjet cartridge refill service on a large scale, but that could be changing. Supplier Inktec Zone is in talks with several retailers about bringing its Ink-O-Matic Inkjet cartridge refilling stations to stores.

“We’re currently conducting tests with four retailers and three of them are in the drug channel,” said Inktec Zone president Bill McKenney. He said he couldn’t name the retailers during the test period, but said they represent both regional and national chains.

Inktec Zone’s stations refill cartridges through the print head with a tiny needle and require less than one hour of training for employees. McKenney said drug stores are a retail channel of choice for the company, since most operate photo centers that are destinations for people who use printers to print their own photos.

“We’ve been in discussions with retailers for a while, but now they’re coming to recognize that the refill market is real,” McKenney said, adding that refills also are a good environmental option for retailers, since up to 1 million empty cartridges end up in landfills each day. A typical cartridge can be refilled up to 20 times.

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Fred’s reports both monthly and quarterly record sales

BY Allison Cerra

MEMPHIS, Tenn. Fred’s Inc. reported record sales for the five-week and eight-month periods which ended Oct. 6, 2007.

The company said Friday that its total sales for the month increased 2 percent to $161.4 million compared to the same period last year. Total sales for the year-to-date period increased 5 percent to $1.157 billion.

Same store sales for the month rose 1 percent on top of a 5 percent increase in September last year. On a comparable store basis, sales increased 1.3 percent through the first eight months of fiscal 2007 compared with a 2.7 percent gain in the year-earlier period. Same-store sales are a key predictor of how well the company performs in stores that have been open for several years, and how well the newly open stores will do in the future.

“September sales came in at the low end of our forecasted range of a 1 percent to 3 percent increase, affected by unusually warm weather across our markets and the disruption caused by the updating of 98 stores under our refresher program,” said Fred’s Stores chief executive officer Michael J. Hayes. “We look forward to finishing our refresher program in October with the last 60 stores and to a better economic environment for our customers going forward, as the benefits of the minimum wage increase and the focus of Federal Reserve Board on the credit crunch take hold.”

Fred’s opened four stores at the end of September, bringing total store openings to 22 for the year-to-date period. These new store openings have been balanced by the company’s decision to close underperforming stores. In the remaining months, Fred’s Stores said that it plans to open 14 additional stores, with no further planned closings, which will result in a net increase in stores of 2 percent for the year.

Fred’s Inc. operates 702 discount general merchandise stores, including 24 franchised stores in the southeastern United States.

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Target to open another 61 stores nationwide

BY Allison Cerra

MINNEAPOLIS Target announced that it will be opening an additional 61 Target stores, the company said Friday.

The stores, which will all open Oct. 14, will open in 22 different states. The majority of the stores are making their debut in Arizona, California, Ohio and Texas.

In addition to offering the latest in trend-right merchandise, Target also brings a 44-year tradition of community involvement. The retail chain commits itself to local communities donating more than $3 million each week to area nonprofit organizations, becoming involved in local volunteerism efforts through Target Volunteers, and orchestrating other special projects that help meet area social service, arts and education needs.

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