From Our Print Edition

Calls with securities analysts show Dollar General is still adding coolers, BJ’s is speeding up resets and Sanderson Farms is hurt by foodservice woes.

Dollar General‘s second quarter net sales increased by 24.4% to $8.7 billion, with comps up by 18.8%. During the first half, it added 30,000+ cooler doors across its base, and it expects to install 60,000+ cooler doors this year. The majority of these doors will be in high capacity coolers to increase shelf holding power and product assortment. DG expects its recently purchased traditional DC (its 18th) in Walton, Ky., to begin shipping early next year. DG Fresh, a strategic multi-phase shift to self-distribution of frozen and refrigerated foods, has proven successful in reducing costs by removing the markup paid to third-party distributors. The program continues to be the largest contributor to the gross margin benefit the company is seeing from higher initial markups on inventory purchases. The company now has nearly 17,000 stores within five miles of 75% of the U.S. population. –August 27 conference call for second quarter ended July 31.

BJ’S WHOLESALE CLUB

Comps in the grocery division grew by 25%, with “very strong growth rates in expected categories, paper products, cleaning essentials, fresh meat and produce, frozen dairy and beverages.” In-stock levels improved during the quarter. BJ’s “dramatically accelerated the reset of our food business with a new set in nearly 200 clubs that incorporates more healthy and organic options, months ahead of our initial schedules.” The goal here was to engage younger shoppers and retain new members. Merchandise sales comps, excluding gasoline, were up 24%. Shoppers are making fewer trips but spending more on each visit. An aggressive membership recruitment program has drawn in more shoppers. –August 20 conference call, for second quarter ended Aug. 1st.

SANDERSON FARMS

Weekly orders from its largest foodservice customers during the third fiscal quarter were as low as 68% of normal and as high as 95% of normal. Average weekly volume ordered during the quarter was 83% of normal.

“We expect demand to be uneven as the country struggles to find a new normal, which will contribute to the continued price volatility for food service products.” The company’s average sales price per pound of fresh and frozen chicken decreased 3% during the quarter of this fiscal year compared to the same period last year. Market prices have been down, and erratic. – August 27 conference call, for third quarter ended July 31.

HOW ABOUT GARANIMALS PLANOGRAMS?

So I was chatting with Alison Cayne, founder of Haven’s Kitchen (see page 19), about aligning planograms with the way people shop. And she brought up Garanimals. Say what?

Garanimals – the kids’ clothing line –got its start in 1972 with a matching animal tag theme so kids could mix and match their own tops and bottoms with no fashion gaffes.

“It’s how I learned to dress myself,” Cayne recalled. So how about food planograms based on the Garanimals concept? Yes, we’ve been talking about in-aisle displays of mix-and-match meals forever, but it’s never happened. That may change now that shoppers are getting used to the ease of buying online, Cayne says.

If you’re looking for a meal using chicken, cauliflower rice and sauce, she notes, you can buy them online in a moment. Maybe even see them on the same page with a suggested recipe. But in a store, you’re trekking off to three different departments, and. . .

Cayne thinks shoppers are getting used to online convenience and will want easier solutions in-store. That’ll require more inter-department cooperation than we’ve seen, and it goes two steps beyond “meal solutions” as practiced. She and I discussed promising new efforts we’ve seen in Whole Foods, Kroger and a few others.

“I don’t see online ever replacing the supermarket,” Cayne says. “People love discovery, learning about new products and building baskets. But maybe the produce-dairy-deli trifecta needs to adapt.”

-Warren Thayer