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Discounter Duckwall-ALCO's Plans to Expand Food

ABILENE, Kan. -- Discount store operator Duckwall-ALCO Stores, Inc. said yesterday it plans to convert more stores to its increasingly food-centric Market Place concept, as part of its corporate initiatives for fiscal 2006.

The emphasis on food is part of a larger strategy to improve operations after a disappointing fiscal 2005, Duckwall-ALCO's chairman Warren Gfeller said in a statement. "We understand the need to elevate the performance of all areas of our company. Fiscal '05 was a disappointing year, and our fourth quarter is well below the same period last year due in part to significant markdowns resulting from the planned cleanup of Christmas seasonal inventories, a technology related write-down and the continuation of high insurance and other costs," Gfeller said.

Specifically, the company will review individual store performance and close any under-performing units; expand its efforts to reduce selling, general, and administrative (SG&A) expenses with specific emphasis on costs of corporate overhead, insurance, utilities, credit card fees, and distribution costs; and work on improving same-store sales with particular emphasis on increasing store traffic, improving customer conversion, and higher average purchase dollars per transaction.

To help boost same-store sales, Duckwall-ALCO said it would convert selected stores to its Market Place concept, which will carry an expanded line of consumables and fresh food products. Other efforts include expanding its gift card program; implementing a new point of sale system; conducting a comprehensive review of store procedures, merchandising, and marketing efforts; and developing an Internet sales strategy.

Duckwall-ALCO Stores, Inc. has 266 stores in 21 states across the central United States, operating under two names, ALCO and Duckwall. ALCO discount stores offer a full line of merchandise, while Duckwall variety stores serve smaller communities, offering a smaller selection.
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