"Our Raleigh market has performed ahead of expectations to date," president and CEO Terry Marks said on an earnings conference call with analysts yesterday. "Feedback from customers and store associates has been very positive, and in sum, we are encouraged with the early results."
Program Fresh provides stores with The Pantry's new Bean Street Coffee [image-nocss] offering and a broader assortment of on-the-go meal and snack items, such as fresh pastries, breakfast and lunch sandwiches, salads and fruits. An associated store redesign includes fewer gondolas, wider aisles and fewer signs in store windows to open the stores to consumers.
Store conversion work in the 46-store Raleigh-Durham market began over the summer and was substantially completed by September.
"Effected locations saw an immediate lift in traffic and merchandise sales that was very much in line with our expectations," Marks said. "In early October, we began a related media-advertising campaign in Raleigh, which has resulted in further momentum."
Initially, executives at The Pantry "were looking for a total merch comp lift in the 2%-3% range," Marks said. "What we've experienced to date in the Raleigh stores has been more in the mid-single-digit range. So we've been quite pleased with the performance of those locations to date, and they continue to exceed our initial expectations going into it."
As a result, The Pantry, a 1,638-store chain based in Cary, N.C., expects to complete more of the store redesigns this year than originally planned.
"Store conversion is now well under way in Charlotte," Marks said, "and we expect that by the end of the calendar year, we will have exceeded our original expectation of completing 100 stores. We now expect to have converted 130 stores by the end of calendar 2010." As many as 500 stores are expected to be converted by the end of 2011.
"We've done a good bit of intercept interviews with consumers in our stores in Raleigh, where the Fresh Initiative was launched," Marks added. "From a qualitative standpoint, the feedback is very strong. Consumers are reacting very positively toward it both in terms of the condition of the stores, as well as the improvement in the product offering, principally our coffee offering."
See a complete breakdown of The Pantry's fourth-quarter 2010 results elsewhere in this issue of CSP Daily News, and watch for more on the chain's new management and strategies in the January 2011 issue of CSP magazine.
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