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Big Lots shopping

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There was a time when we all bought our groceries at the grocery store. Then big box stores like Walmart and Target got into the grocery business. Lately, dollar stores have been making a run at capturing more grocery dollars. Now, there’s an even more unlikely retailer angling for more of your grocery business – a store with a reputation of selling an eclectic assortment of stuff that fell off a truck.

Are you prepared to do all your grocery shopping at Big Lots?

The closeout chain is betting on food in a big way. It still boasts of offering “surprises in every aisle”, but now it’s aiming to be a little less surprising in its growing food and consumable aisles.

Big Lots has announced that it will double the number of “never-out” items it carries in its stores – from the current 260 guaranteed in-stock items, to more than 550. In the past, store executives say, a shopper might come in looking for condiments and find ketchup but not mustard. The next time that customer comes in, they might find their mustard, but by then the ketchup is cleared out.

Grocery shoppers tend to shop with a list, after all – not with a carefree desire to go on a treasure hunt through whatever items happen to be available at Big Lots that day.

So if, for example, Kraft Macaroni and Cheese is on your list, you’d have been disappointed 48 out of 52 weeks last year – because Big Lots only had it in stock for four of those weeks. Now, it’s struck a deal to ensure the popular product – and many others – are always on shelves and “never out”.

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The never-out additions come in conjunction with Big Lots’ recent efforts to expand its food and consumables sections. It’s already decided to phase out clothing altogether, and install coolers and freezers in nearly all Big Lots locations by the end of next year.

“Value channel” shoppers – who tend to gravitate to places like Walmart and dollar stores – go on roughly one food shopping trip per week, Big Lots Chief Merchandising Officer Rich Chene told an investors conference last week. “We think that there’s a lot of trips that we can capitalize on, and gain, and if you will, steal” from competitors, he said.

Big Lots CEO David Campisi considers it a way to get more shoppers through the doors. It’s “a significant opportunity for us to drive significant frequency of footsteps into the box,” he told investors last month, “and hopefully convert… that consumer into other areas of the store.”

Right now, food represents 30% of Big Lots’ total business. It may sound like a lot, but it’s not really, compared to Dollar Tree’s 49%, Walmart’s 55%, Family Dollar’s 72% and Dollar General’s 75%. With figures like that, doing the bulk of your grocery shopping at a dollar store may not seem so far fetched. Getting your groceries at Big Lots just might.

And unlike Walmart, dollar stores and grocery stores, Big Lots doesn’t accept manufacturer’s coupons (its standard explanation is “due to our already low, closeout pricing, we do not accept manufacturer’s coupons.”) That would certainly make couponers skeptical about doing much of their regular weekly shopping there.

Some analysts have expressed skepticism too. The Big Lots customer “may say she wants consistency,” Barclays Capital retail analyst Meredith Adler noted in an investors conference call late last year, “but why would she shop at Big Lots to buy paper towels or to buy cleaning supplies when she can get them almost anywhere?”

It’s a question that Big Lots executives on the call didn’t really address. In the end, to the question of whether people will really do their grocery shopping at Big Lots, it will be up to Big Lots shoppers to provide the ultimate answer.

Image source: Big Lots

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2 Comments

  1. First Stock Worth the extra pennies says:

    They are never out of (broken, split noodles) Kraft Mac ‘n Cheese!

  2. I still get far better deals elsewhere, using coupons.

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