Oct. 10--While many retailers try to find ways to combat flat consumer spending, Family Dollar is looking into the future of continued growth.

The nationwide chain store posted record profits in its fourth quarter for fiscal year 2008 despite economic hardships facing Americans.

Net sales have topped $1.7 billion, an 8.2 percent increase over the previous year, and net income is sitting at 53.1 million, a 40 percent jump.

Family Dollar Regional Vice President Will Frace said that while some competitors battle the economy, the economy has been exactly what has helped drive sales.

"We were actually anticipating it, based on the economic stimulus package," Frace said. "I think it's a fairly typical pattern that you see when the economy slows."

Citing the placement of stores in or near neighborhoods, low prices and quick convenience, he noted that those are the things consumers are looking for as commodity prices and gas costs increase.

"People still have to get paper towels, bleach, laundry detergent," he said. "And if you can get them 10 to 20 percent cheaper than anywhere else, why wouldn't you?"

Family Dollar sales nationwide have seen the increase in point-of-service sales. But what's selling has been the biggest surprise.

"The biggest driver is consumables for us. Interestingly, seasonal and home items are seeing a decrease," Frace said. "So people are purchasing the things that they need and not necessarily the things that they want."

Consumable purchases for the chain are up 13 percent from the prior year, and while foot traffic has grown some, it has really been the average sale that has increased.

"That really drives it home that folks are appreciating the value of those needed items," he said.

The spike in demand has also lead to higher volumes for the distribution center. Frace said items are flowing through the center 4 percent more than last year.

"As our stores go, so do we," he said.

With plans to continue expanding operations -- Family Dollar added 250 stores last year -- Frace said he expects that the growth being experienced now is something that will continue into future, as long as stores continue to outperform the previous year's sales.

"The driving factor is really value and convenience," he said. "I would anticipate we would continue to add stores."

-----

To see more of The Duncan Banner, or to subscribe to the newspaper, go to http://www.duncanbanner.com.

Copyright (c) 2008, The Duncan Banner, Okla.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

NYSE:FDO,