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Seedless mandarins to become market standard in Australia, says Freshmax exec

With small volumes of Sumo Citrus, Gold Nugget and Tang-Gold mandarins set to hit the market this season, Freshmax Australia is peeling ahead of the curve when it comes to consumer trends Down Under. But the company’s ambitious planting program includes an export strategy too, as GM for category and integrated supply Andrew Maughan tells Freshfruitportal.com.

With its “lumpy-bumpy” skin the Sumo Citrus-branded mandarin is a far cry from the smooth citrus normally seen at the supermarket, but that’s exactly the kind of point of difference Freshmax is looking for.

After all, Maughan says the company is now reaping the fruits of labor that has been ongoing for the last 10 years to grow and market protected varieties.

It’s a philosophy that spans a wide range of produce items under the group’s umbrella, and in citrus the big bet has been on seedless cultivars.

“We think that seedless easy peelers will become market standard in Australia in the not too distant future, and it’ll be non-negotiable to have seedless or very low-seeded fruit in this marketplace,” the executive says.

“In Australia we’re only just starting to get these seedless varieties into commercial volumes.

“There’s been exceptional growth in demand for easy peel and seedless fruit. It’s a rapidly growing category through North America, Europe and the U.K.”

Freshmax licenses the Sumo Citrus variety from Suntreat Packing & Shipping Co.in California, and the ultimate goal is to be a counterseasonal supplier back into the North American market while also working with the partner to aim for year-round supply into a variety of Asian countries.

Freshmax's Sumo Citrus-branded fruit

Freshmax’s Sumo Citrus-branded fruit

“This year we intend to be doing a few shipments in a small trial back into North America with both airfreight and seafreight. We did a little bit of airfreight last year, but that becomes cost-prohibitive when you start talking large volumes.

“We’ve commenced some small export programs into Southeast Asia, and done more work with developing export markets.

But with only around 25-30% of the 150 hectares of Sumo Citrus actually producing fruit, the bulk of volume will be staying in Australia for now.

“There are some trees that are just being planted now, so peak production is not going to hit with these current plantings for another four to five years’ time,” Maughan says.

“Sumo Citrus has ranged with Woolworths supermarkets in Australia for the last three years – it’s been exclusively through that retailer up to this point of time.

Going for gold

In mid-August, Freshmax will also start supplying another rough-skinned mandarin variety called the Gold Nugget.

“The Gold Nugget is quite a unique looking bit of fruit. It’s a later season maturing variety that’s gone away from the typical easy peelers going around.

Gold Nugget easy peelers

Gold Nugget easy peelers

“It does have a coarse textured skin. Initially it was a real negative or challenge to the variety as it’s not that smoother, fine-textured skin.”

When trees are in the juvenile stages, as many are now with 20% of the 100 hectares in production, the fruit tends be lumpier.

“But once the tree gets a little older it does settle down and produces a smoother piece of fruit. It is lighter in color than an Afourer or a Murcott is, but it creates a really good marketing point of difference,” Maughan says.

“It doesn’t have the top knot and it’s not as lumpy as Sumo Citrus is, but it’s certainly quite a coarse piece of fruit that is very unique.

“What’s good is you can have Afourer or Murcott on the shelf and have Gold Nugget on the shelf at the same time, and have a very easy distinction and point of difference. It’s seedless, it has an exceptional flavor – very sweet – and it’s a great eating piece of fruit.”

As there are currently only small volumes, Freshmax will probably only be selling the Gold Nugget variety over a four to five week window.

“It won’t be in every supermarket in every state at this point of time, but in time it’ll have the ability to be in the marketplace for a few months at least.

“And depending on production in the later areas that could give us some category extension for supply. You’ve got a fairly big window for maturity from harvest so you’re not pigeonholed into a small time window…it has good shelf life as well.”

The Gold Nugget is a product of the University of California breeding program, and is genetically seedless unlike the Tango – registered as Tang-Gold in Australia – which was bred to be seedless through the irradiation of budwood.

Freshmax is an Australian licensee for Tang-Gold as well, and Maughan is particularly bullish on the variety’s future.

“For Tang-Gold we have our first little bits of small-scale commercial volume this year, with a dozen or so pallets, but those pallets are going to grow very significantly and quickly,” he said.

“There will be 400 hectares of Tang-Gold in Australia, tree caps have pretty much been filled and tree plantings are going on pretty seriously now.

“Over the next two to three years we’ll see the vast majority of those hectares all planted. In five years’ time that’ll be a pretty significant player in this market.

Maughan highlights Australia’s geographical advantage for exports of all three of these varieties into Asia, and also how Australia’s diverse range of geographies and micro-climates allows for a long citrus production window.

“Within Australia there are several different growing regions which gives us the opportunity to have a pretty long window of supply – Queensland in the northern area which has been a traditional mandarin growing area is earlier.

“We anticipate that Tang-Gold grown in northern Australia will be in the market sometime in May and we’ll go to the southern parts of Australia that are traditionally Navel-growing areas, and we think it’s possible to have fruit harvested right through to October.

“We think there are opportunities with Tang-Gold from the domestic market perspective where we can range product for five months, and there will be a market for certain export markets,” he says, emphasizing Freshmax is still assessing where they will be, but there will be significant supply for U.S. and Canadian importers.

Looking at the overall situation, Maughan says seedless Tang-Gold will most likely be the main easy peeler cultivar, while Sumo Citrus and Gold Nuggets will occupy a different space in the market as IP varieties.

“Gold Nugget will be slightly more of a niche variety – it’s got that coarser texture to it. Sumo Citrus kind of sits in a different category; it’s larger, and it has exceptional eating quality.

“Tang-Gold will become what we believe will be the mainstream mid-to-late season easy peeler variety in Australia with very strong demand for counterseasonal supply into the Northern Hemisphere – the USA, Japan, Korea, China, Southeast Asia, the EU as well.”

www.freshfruitportal.com

 

FreshFruitPortal.com

Trucker strike impacts Colombia’s reliability overseas, says fruit exporter

At the time of writing on Friday, a trucker strike in Colombia had been going on for 39 days straight. While some growers closer to the coast had been left relatively unscathed, others had been forced to leave entire crops on trees as long as possible. At www.freshfruitportal.com we catch up with Productora Agrícola del Caribe manager German Pardo, who grows pineapples, papayas, avocados and mangoes over an area of 450 hectares.

Pardo says while 60% of the company’s production was near the Caribbean coast, 40% comes from the country’s interior, specifically from the departments of El Cesar and Santander.

In these areas, the national truck driver strike has halted not only harvests, but exports too.

“Yes, it has affected us a lot. Initially we had some problems with the transport of the fruit to the ports, but now the biggest worry is that we have had to suspend harvests to avoid fruit being damaged or decomposing en route, and that losses could be very large with trucks stopped on the roads,” he says.

In the first two weeks alone the company lost 160 metric tons (MT) of fruit, and it was three weeks ago that Productora Agrícola del Caribe decided to stop harvests in the interior.

If the problem persists, fruit will be lost in the fields as well. Agricola Productora del Caribe - pineapples

“The fruit continues the ripening process and eventually it also decomposes and is lost. We only have cold storage facilities for pineapples, so we haven’t been able to resolve the problem with avocados and papayas,” Pardo says.

He says the fruit still has to be picked eventually, and if they can’t be traded they will be disinfected and used as organic compost.

“This situation affects Colombia’s reliability in overseas markets,” he says.

Pardo says the company has customers in Switzerland, Belgium, Austria and Germany, and the current situation has led to an inability to fully comply with commitments.

“Evidently we are failing, and they have to explain to the supermarkets what’s happening. This affects the whole chain and our image of reliability, both for companies and the country. We hope this is overcome soon.

“We agree with the truck drivers’ right to complain, but we do not agree when their fight for themselves damages many people, and so the right they are claiming goes against our right to subsist and fulfill our business.”

Pardo says pineapples and avocados have been the most affected crops for his business, and because of a halt in exports of these fruits the company has stopped its previous pace of 80MT of pineapples per week and 30MT of avocados.

www.freshfruitportal.com

 

FreshFruitPortal.com

Retailers have opportunity in ‘sharing economy,’ analyst says

The rise of the so-called “sharing economy” led by the Uber car service app will challenge retailers to respond to customers increasingly demanding similar convenience and delivery speed for all things they consume, according to a new report from analyst Deborah Weinswig of Fung Business Intelligence Center (FBIC).

“Inspired by Uber’s business model and the concept of sharing and an on-demand economy, start-ups are increasingly seeking to ‘Uberfy’ the world with convenient mobile services that match demand with supply conveniently via software,” Weiswig wrote. “From laundry and medical marijuana to in-home massage and the outsoyrcing of errands, there is an app that will get it for you with just one click.

“Those who have experienced these services are going to demand faster turnaround times on everything at the convenience levels they have become accustomed to,” she added. “This new consumer mindset challenges retailers to be more responsive.”

The FBIC report cited startups in dozens of categories that, like Uber, utilize mobile apps aligning supply and demand and facilitate payment allowing for convenient execution of services ranging from babysitting (Urban Sitter) to medical needs (Pager, Medicast) to private jets (Blackjet).


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Launched in San Francisco in 2009, Uber is now available in 200 cities worldwide and has a current market valuation of $ 40 billion, Weinswig noted. Leveraging its drivers has allowed the company to diversify into experimental delivery-on-demand services including UberFRESH, a lunch delivery option now available in certain California markets and Uber Corner Store, which enables delivery of convenience items now testing in the Washington, D.C. area.

Some traditional retailers are already responding to to the on-demand economy with similar services, the report said, citing the British shirt retailer Pink, which has introduced a new app enabling home or office delivery of a shirt within 90 minutes of an order.

The success of Uber and pricing that varies by demand has also highlighted consumer willingness to pay for convenience, Weinswig said.

“An Uber ride is not always chaper than a cab ride, which means that consumers are willing to pay a premium for on-demand services,” she wrote. “Armed with this insight, retailers can identify other areas where customers are willing to pay more for convenience.”

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Retailers have opportunity in ‘sharing economy,’ analyst says

The rise of the so-called “sharing economy” led by the Uber car service app will challenge retailers to respond to customers increasingly demanding similar convenience and delivery speed for all things they consume, according to a new report from analyst Deborah Weinswig of Fung Business Intelligence Center (FBIC).

“Inspired by Uber’s business model and the concept of sharing and an on-demand economy, start-ups are increasingly seeking to ‘Uberfy’ the world with convenient mobile services that match demand with supply conveniently via software,” Weiswig wrote. “From laundry and medical marijuana to in-home massage and the outsoyrcing of errands, there is an app that will get it for you with just one click.

“Those who have experienced these services are going to demand faster turnaround times on everything at the convenience levels they have become accustomed to,” she added. “This new consumer mindset challenges retailers to be more responsive.”

The FBIC report cited startups in dozens of categories that, like Uber, utilize mobile apps aligning supply and demand and facilitate payment allowing for convenient execution of services ranging from babysitting (Urban Sitter) to medical needs (Pager, Medicast) to private jets (Blackjet).


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Launched in San Francisco in 2009, Uber is now available in 200 cities worldwide and has a current market valuation of $ 40 billion, Weinswig noted. Leveraging its drivers has allowed the company to diversify into experimental delivery-on-demand services including UberFRESH, a lunch delivery option now available in certain California markets and Uber Corner Store, which enables delivery of convenience items now testing in the Washington, D.C. area.

Some traditional retailers are already responding to to the on-demand economy with similar services, the report said, citing the British shirt retailer Pink, which has introduced a new app enabling home or office delivery of a shirt within 90 minutes of an order.

The success of Uber and pricing that varies by demand has also highlighted consumer willingness to pay for convenience, Weinswig said.

“An Uber ride is not always chaper than a cab ride, which means that consumers are willing to pay a premium for on-demand services,” she wrote. “Armed with this insight, retailers can identify other areas where customers are willing to pay more for convenience.”

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USDA’s Annual Report on Pesticide Residues Says Levels Still Safe

While more than half of foods tested for pesticides this year were found to have at least trace amounts of the chemicals, most amounts fell below “tolerance levels” set by the U.S. Environmental Protection Agency, according to the annual report on pesticides released by the U.S. Department of Agriculture.

The agency’s annual report, made in cooperation with the U.S. Food and Drug Administration, looked at levels of pesticides in fresh and processed fruits and vegetables, baby food, infant formula, butter, salmon and water. The agencies rotate through a number of commodities to test from year to year.

Critics of the annual report have questioned the fact that the agency does not track levels of glyphosate, the active ingredient in Monsanto’s Roundup weedkiller and the most commonly used herbicide in the U.S.

Earlier this month, the Government Accountability Office (GAO) released a report critical of the agencies’ pesticide-monitoring program. The report came with a number of recommendations, including expanding the number of food samples tested, focusing on pesticides for which there are EPA-established tolerance levels, and more clearly disclosing that they do not test for all pesticides used on foods.

The GAO report noted that, in total, the program tests less than one-tenth of 1 percent of imported fruits and vegetables, and less than 1 percent of domestic fruits and vegetables. FDA responded, saying that it would investigate the feasibility of changing its testing model, but doing so would require more resources.

Regarding pesticides for which the USDA did test, the agency said that more than 99 percent of samples tested lower than EPA’s tolerance levels and that more than 40 percent of samples showed no detectable level of pesticides.

USDA says that, before a pesticide is approved for use in the U.S., EPA must ensure that it does not pose “unreasonable” risk to consumers.

In any instance where the program detects unsafe levels of pesticides, FDA and EPA are said to be immediately notified in order to carry out regulatory action.

The program releases its report the following year after sampling has been completed, meaning that this year it released the 2013 data. In 2013, the program collected samples from California, Colorado, Florida, Maryland, Michigan, Minnesota, Montana, New York, North Carolina, Ohio, Texas, Washington and Wisconsin.

For more information on the pesticide-monitoring program, visit that page at the USDA’s website.

Food Safety News

Wholesalers face serious challenges, report says

Serious financial challenges are likely to continue for U.S. grocery wholesalers for at least the next five years, and companies that fail to improve efficiency and deliver increased value to customers will be in danger of shutting down, according to a report by IBISWorld.

IBISWorld is a market research firm based in Melbourne, Australia, with offices around the world.

According to the report, large grocery wholesalers have been able to expand market share over the last few years, while smaller, often underperforming companies have scaled back or exited the market altogether, causing the industry to contract, and the number of wholesalers is likely to continue to decline over the next five years.

Consumer demand at supermarkets is expected to increase slowly in 2015, “and this slow growth represents a potential threat to the [wholesale] industry,” the report indicated.

Posing a further threat is the trend among supermarkets and other food distributors to bypass wholesalers and buy directly from manufacturers and growers — a trend IBIS said has escalated quickly over the past three years because of rising food prices.

As an improving economy encourages more consumers to dine out, “savvy wholesalers will re-position themselves in a bid to capture new restaurant and fast-food chain customers, and these outlets will form a growing portion of the industry’s customer base,” the report said.


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It also suggested wholesalers may opt to move more into niche markets to serve formats that cater to ethnic communities such as Hispanics and Asians. “With traditional grocery stores underserving ethnic markets and demand for ethnic foods increasing, wholesalers will have an opportunity to serve these niche markets and cultivate relationships with manufacturers of ethnic foods,” the report noted.

“However, larger wholesalers are expected to start distributing more specialized goods in the next five years as they compete with manufacturers who self-distribute,” the report warned.

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Dollar General committed to Family Dollar pursuit, Dreiling says

Dollar General Stores remains committed to acquiring rival Family Dollar Stores, Rick Dreiling, chairman and CEO, told analysts Thursday.

Family Dollar, Charlotte, N.C., has already agreed to be acquired by Chesapeake, Va.-based Dollar Tree, pending government approval. However, Dreiling said Dollar General expects to provide Family Dollar shareholders with an update on its offer “in time for [those] shareholders to review such information” prior to a Family Dollar shareholder meeting scheduled for Dec. 23.

Rick Dreiling“We are very aware of the calendar, and we look forward to sharing more information with sufficient time for Family Dollar shareholders to make an informed voting decision,” Dreiling noted. ” We are as committed as ever to this acquisition and believe the synergies we expect to achieve through the combination of the two companies would benefit Dollar General shareholders and, importantly, the consumer for many years to come. 

“We’re working hard to be in a position to complete this transaction and begin the process of combining our two companies. To that end, we are actively engaging with [government agencies] and believe we are making good progress on that front.”

Commenting on Dreiling’s remarks, John Heinbockel, managing director for Guggenheim Securities, New York, said it remains unclear what the company’s updated offer to Family Dollar might entail “or when it will be provided, although the clock is ticking.

“From an economic perspective, Dollar General has room to raise its $ 80 bid, although unless it has very good visibility on the Federal Trade Commission’s thinking on store divestitures, there would likely be a limit beyond which it would go. While it may be able to offer insights into the tone of its conversations with the FTC, specifics are always difficult until the process nears its conclusion.”

Dreiling spoke with analysts during a conference call to discuss financial results for the third quarter and 39 weeks ended Oct. 31.

Net income for the 13-week quarter declined 0.5% to $ 236.3 million, while sales increased 7.8% to $ 4.7 billion and same-store sales rose 2.8%, reflecting increases in both customer traffic and average ticket.

For the 39-week period net income grew 1% to $ 710 million, while sales climbed 7.4% to $ 14 billion and same-store sales increased 2.1%.

Comp-store sales increases improved as the company moved through the third quarteer and into the fourth, Dreiling said, leading the company to anticipate a same-store sales increase for the fourth quarter of 5%.

Dreiling also said sales of consumables increased 8.4% to $ 2.6 billion for the quarter and 8.2% to $ 10.7 billion for the year to date.


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Asked about expanding perishablesbeyond the chain’s DG Market locations, Dreiling said, “One of the areas we’ve struggled with most at DG Markets is on the fresh side — produce and meat.

“When you grow up as I did managing a grocery store, managing meat and produce, you realize you must treat those items like a living thing. But when you don’t grow up with that, it’s very hard to get people to understand the importance of rotation and display techniques.

“However, we love frozen and we’ve done a lot of great work on that, and we’ve done well on easier-to-manage perishables like cheese and butter and orange juice.

“So long term, I think it’s possible Dollar General might have some sub-set of fresh merchandise, like perhaps oranges and apples and bananas and potatoes. But for right now, getting into any kind of significant position on perishables merchandise is probably not on our radar screen.”

In other comments to analysts:

• Dreiling said Dollar General expects to expand into three new states in 2015 — Maine, Oregon and Rhode Island — and it anticipates opening its 13th distribution center, in San Antonio, with shipments expected to start late in 2015.

• The company plans life-cycle upgrades at smaller stores “that would [normally] go into a relocation bin,” Dreiling said. “We’re going to freshen those stores up and remodel them by analyzing movement though category management and then adjusting the sets to reflect what [is selling best].

“For example, we have a diaper set that’s exactly the same in every store across the chain. Now we’ll be able to contract diapers and maybe expand on incontinence products in areas where the clientele is older. We’re really excited about this, where we can really understand what’s selling and what’s not, on an individual store basis.”

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Dollar General committed to Family Dollar pursuit, Dreiling says

Dollar General Stores remains committed to acquiring rival Family Dollar Stores, Rick Dreiling, chairman and CEO, told analysts Thursday.

Family Dollar, Charlotte, N.C., has already agreed to be acquired by Chesapeake, Va.-based Dollar Tree, pending government approval. However, Dreiling said Dollar General expects to provide Family Dollar shareholders with an update on its offer “in time for [those] shareholders to review such information” prior to a Family Dollar shareholder meeting scheduled for Dec. 23.

Rick Dreiling“We are very aware of the calendar, and we look forward to sharing more information with sufficient time for Family Dollar shareholders to make an informed voting decision,” Dreiling noted. ” We are as committed as ever to this acquisition and believe the synergies we expect to achieve through the combination of the two companies would benefit Dollar General shareholders and, importantly, the consumer for many years to come. 

“We’re working hard to be in a position to complete this transaction and begin the process of combining our two companies. To that end, we are actively engaging with [government agencies] and believe we are making good progress on that front.”

Commenting on Dreiling’s remarks, John Heinbockel, managing director for Guggenheim Securities, New York, said it remains unclear what the company’s updated offer to Family Dollar might entail “or when it will be provided, although the clock is ticking.

“From an economic perspective, Dollar General has room to raise its $ 80 bid, although unless it has very good visibility on the Federal Trade Commission’s thinking on store divestitures, there would likely be a limit beyond which it would go. While it may be able to offer insights into the tone of its conversations with the FTC, specifics are always difficult until the process nears its conclusion.”

Dreiling spoke with analysts during a conference call to discuss financial results for the third quarter and 39 weeks ended Oct. 31.

Net income for the 13-week quarter declined 0.5% to $ 236.3 million, while sales increased 7.8% to $ 4.7 billion and same-store sales rose 2.8%, reflecting increases in both customer traffic and average ticket.

For the 39-week period net income grew 1% to $ 710 million, while sales climbed 7.4% to $ 14 billion and same-store sales increased 2.1%.

Comp-store sales increases improved as the company moved through the third quarteer and into the fourth, Dreiling said, leading the company to anticipate a same-store sales increase for the fourth quarter of 5%.

Dreiling also said sales of consumables increased 8.4% to $ 2.6 billion for the quarter and 8.2% to $ 10.7 billion for the year to date.


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Asked about expanding perishablesbeyond the chain’s DG Market locations, Dreiling said, “One of the areas we’ve struggled with most at DG Markets is on the fresh side — produce and meat.

“When you grow up as I did managing a grocery store, managing meat and produce, you realize you must treat those items like a living thing. But when you don’t grow up with that, it’s very hard to get people to understand the importance of rotation and display techniques.

“However, we love frozen and we’ve done a lot of great work on that, and we’ve done well on easier-to-manage perishables like cheese and butter and orange juice.

“So long term, I think it’s possible Dollar General might have some sub-set of fresh merchandise, like perhaps oranges and apples and bananas and potatoes. But for right now, getting into any kind of significant position on perishables merchandise is probably not on our radar screen.”

In other comments to analysts:

• Dreiling said Dollar General expects to expand into three new states in 2015 — Maine, Oregon and Rhode Island — and it anticipates opening its 13th distribution center, in San Antonio, with shipments expected to start late in 2015.

• The company plans life-cycle upgrades at smaller stores “that would [normally] go into a relocation bin,” Dreiling said. “We’re going to freshen those stores up and remodel them by analyzing movement though category management and then adjusting the sets to reflect what [is selling best].

“For example, we have a diaper set that’s exactly the same in every store across the chain. Now we’ll be able to contract diapers and maybe expand on incontinence products in areas where the clientele is older. We’re really excited about this, where we can really understand what’s selling and what’s not, on an individual store basis.”

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Dollar General committed to Family Dollar pursuit, Dreiling says

Dollar General Stores remains committed to acquiring rival Family Dollar Stores, Rick Dreiling, chairman and CEO, told analysts Thursday.

Family Dollar, Charlotte, N.C., has already agreed to be acquired by Chesapeake, Va.-based Dollar Tree, pending government approval. However, Dreiling said Dollar General expects to provide Family Dollar shareholders with an update on its offer “in time for [those] shareholders to review such information” prior to a Family Dollar shareholder meeting scheduled for Dec. 23.

Rick Dreiling“We are very aware of the calendar, and we look forward to sharing more information with sufficient time for Family Dollar shareholders to make an informed voting decision,” Dreiling noted. ” We are as committed as ever to this acquisition and believe the synergies we expect to achieve through the combination of the two companies would benefit Dollar General shareholders and, importantly, the consumer for many years to come. 

“We’re working hard to be in a position to complete this transaction and begin the process of combining our two companies. To that end, we are actively engaging with [government agencies] and believe we are making good progress on that front.”

Commenting on Dreiling’s remarks, John Heinbockel, managing director for Guggenheim Securities, New York, said it remains unclear what the company’s updated offer to Family Dollar might entail “or when it will be provided, although the clock is ticking.

“From an economic perspective, Dollar General has room to raise its $ 80 bid, although unless it has very good visibility on the Federal Trade Commission’s thinking on store divestitures, there would likely be a limit beyond which it would go. While it may be able to offer insights into the tone of its conversations with the FTC, specifics are always difficult until the process nears its conclusion.”

Dreiling spoke with analysts during a conference call to discuss financial results for the third quarter and 39 weeks ended Oct. 31.

Net income for the 13-week quarter declined 0.5% to $ 236.3 million, while sales increased 7.8% to $ 4.7 billion and same-store sales rose 2.8%, reflecting increases in both customer traffic and average ticket.

For the 39-week period net income grew 1% to $ 710 million, while sales climbed 7.4% to $ 14 billion and same-store sales increased 2.1%.

Comp-store sales increases improved as the company moved through the third quarteer and into the fourth, Dreiling said, leading the company to anticipate a same-store sales increase for the fourth quarter of 5%.

Dreiling also said sales of consumables increased 8.4% to $ 2.6 billion for the quarter and 8.2% to $ 10.7 billion for the year to date.


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Asked about expanding perishablesbeyond the chain’s DG Market locations, Dreiling said, “One of the areas we’ve struggled with most at DG Markets is on the fresh side — produce and meat.

“When you grow up as I did managing a grocery store, managing meat and produce, you realize you must treat those items like a living thing. But when you don’t grow up with that, it’s very hard to get people to understand the importance of rotation and display techniques.

“However, we love frozen and we’ve done a lot of great work on that, and we’ve done well on easier-to-manage perishables like cheese and butter and orange juice.

“So long term, I think it’s possible Dollar General might have some sub-set of fresh merchandise, like perhaps oranges and apples and bananas and potatoes. But for right now, getting into any kind of significant position on perishables merchandise is probably not on our radar screen.”

In other comments to analysts:

• Dreiling said Dollar General expects to expand into three new states in 2015 — Maine, Oregon and Rhode Island — and it anticipates opening its 13th distribution center, in San Antonio, with shipments expected to start late in 2015.

• The company plans life-cycle upgrades at smaller stores “that would [normally] go into a relocation bin,” Dreiling said. “We’re going to freshen those stores up and remodel them by analyzing movement though category management and then adjusting the sets to reflect what [is selling best].

“For example, we have a diaper set that’s exactly the same in every store across the chain. Now we’ll be able to contract diapers and maybe expand on incontinence products in areas where the clientele is older. We’re really excited about this, where we can really understand what’s selling and what’s not, on an individual store basis.”

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