Family Dollar Stores has benefited from tough economic times as it has grown its base of customers, including those with higher incomes than the chain's traditional shopper. Now, it is looking to expand on those gains with a new ad campaign that tells customers that the items they normally buy at the supermarket can be found at Family Dollar but at a cheaper price.
James Kelly, president and chief operating officer of Family Dollar, told Reuters that more affluent consumers (those with household incomes up to $70,000) are shopping at the chain's stores but they're "not shopping the whole store."
Family Dollar's answer includes store remodels and its new ad campaign. Store changes include regrouping items to link complementary products and categories, such as baby products, in adjacent positions on the shelf. Stores are also looking to remove clutter and clean up signage to provide a less chaotic shopping experience.
The company's new ad campaign shows popular national brands such as Kraft Macaroni & Cheese with copy that reads: "Exactly the same as the grocery store. We just price them lower."
Discussion Questions: Will Family Dollar's new ad campaign have success in moving consumers from supermarkets to its stores? What are the biggest challenges that Family Dollar faces in its attempt to expand its shopper base?