FRED’S STARTS EVERYDAY LOW PRICING
Byline: Don Kaplan
NEW YORK — Fred’s Inc., the Memphis, Tenn.-based discounter, is slashing prices on 800 items as part of an everyday-low-price strategy that goes into full swing on Monday.
The new policy, according to Michael J. Hayes, president and chief executive officer of the 184-unit chain, affects all general merchandise departments. Fred’s did $347.9 million in sales in fiscal 1994. The stores, located from Tennessee to Florida, range in size from 13,000 to 18,000 square feet and carry 12,000 general merchandise items. So far, prices have been reduced on about 400 items and an additional 400 items will be cut by Monday, Hayes said.
Soft lines represent 20 percent of the total business. Key labels include Rustler, Hanes and Fruit of the Loom.
According to Hayes, the new pricing program is designed to keep the store competitive but is not geared specifically to offset competition from Wal-Mart or other national chains.
“We’re not out to be the lowest priced [discounter] in the world, but I think with this program we can be very competitive in our niche.”
The new pricing strategy, he said, “will hopefully build a cycle where we can further reduce our reliance on sale events, continue to roll back prices on additional merchandise and build even greater market share. In concept, this program will continue through several phases, involving more and more merchandise.”
Hayes admitted, “These price reductions may initially result in lower overall sales. However, as our customers come to recognize Fred’s as a store that offers good values day-in and day-out we believe they will shop our stores more regularly, not just during sale events.”