Business Insider/Mary Hanbury
- Family Dollar's stores are going to get even fuller as the chain makes its shelves taller.
- Its CEO said this means it can add 1,000 more items to its product range.
- Family Dollar's stores are often cluttered. Dead rodents were found at a distribution center last year.
Family Dollar is making its shelves even taller to enable it to add hundreds more products to its stores.
"We have begun raising the shelf height to a 70-inch profile throughout the stores to enable us to broaden the product offering for our shoppers," Rick Dreiling, CEO of parent company Dollar Tree, said at its fourth-quarter earnings call on Wednesday.
"This profit-enhancing initiative allows us to grow our SKU base by 1,000 items."
SKUs – or stock-keeping units – refer to how many unique items a company sells.
Family Dollar stores are already bursting full of merchandise. Dreiling, who took over as CEO in January, emphasized his desire to clean up Family Dollar and Dollar Tree's stores during the call.
"We must improve our store and DC conditions, and we are in the process of doing so," Dreiling told investors, referring to its distribution centers. "Frankly, stores and DCs were not being maintained up to our new leadership standards. We are actively transitioning from what we consider to be reactive to proactive maintenance approach."
The chain's stores are known for their mess and disorganization, with one worker telling Insider the store they worked at was "unhygienic and disgusting."
Concerns about Family Dollar's stores escalated when federal inspectors found live and dead rodents, dead birds, and animal droppings inside a distribution center last year.
Family Dollar temporarily closed 404 stores that had received products from the facility – 5% of its total US store count – and issued a voluntary recall of some of the products. It ultimately closed the distribution center.
A retail consultant told Insider that inventory pile-ups and staffing shortages could be to blame for the infestation.
During Wednesday's call, Dreiling spoke about the importance of swiftly moving items to the shop floor.
"As a high transaction volume business, it's critical we have processes in place to get product onto our shelves quickly," he said. "I am certain that we can't sell a product if it's in the backroom."
Dreiling discussed some plans to change the layout of Family Dollar's stores, including adding more cooler doors for frozen and refrigerated items. The chain's goal is to have 30 doors per store, he said.