Fred’s, Inc. (NASDAQ:FRED) SuperDollar is a discount store offering household products, foods and beverages, paper products, health and beauty needs, tobacco, cleaning supplies, apparel, pet products, and just about everything else. Fred’s also operates pharmacies in a large percentage of their stores. This company is focused on providing goods to low, middle, and fixed income families in small to mid-size towns. Fred’s states that their mission is to be “the hometown discount store that provides a fast, fun and friendly low-price place to shop!” Fred’s may also be a fast and fun way to make profits.
Fred’s currently operates 700 stores in the southeastern United States, including 320 that double as pharmacies. Fred’s carries brand name products such as Procter & Gamble, Kimberly Clark, and Coca Cola, but mainly focus on selling their own Fred’s brand for $1. Their brand makes generic versions of people’s favorite foods, along with a full line of baking products, cleaning products, personal care products, and more. These products go through thorough testing and have actually won awards against leading national brands.
A huge upside for Fred’s is that they own and operate pharmacies. Fred’s Pharmacy accepts most all insurance plans, including Express Scripts, Humana, Cigna, TRICARE, Blue Cross, CVS Caremark Corporation (NYSE:CVS), and Medicare. They can fill all of your prescription needs online through their website or on your mobile device using their app. Fred’s Pharmacy also offers generic drugs for just $4. They have a Fred’s line of products for allergies, cold and flu, vitamins, headache relief, ibuprofen, and over 50 others. $4 is an incredible deal compared to what you will pay for Johnson & Johnson products.
In January, Fred’s announced they would be expanding pharmacy operations by adding clinical services. This would be like the Minute Clinic at CVS. They are also looking to acquire pharmacies in their current store areas to increase their presence. This will be a great addition to Fred’s model.
While you are taking care of your own health at Fred’s, you can take care of your best friend while you’re at it. Fred’s carries all of the pet care products you need. They carry everything from shampoo and dental care products to flea, heartworm, arthritis, and cancer medications. This means Fred’s is like Dollar General Corp. (NYSE:DG), CVS, and PetSmart combined.
Franchising
Fred’s has made an incredible move by adding franchises. They currently have 21 franchised stores in 15 states, and this number could continue to grow. There is no information listed on their website, as most franchises do, but this should change eventually. If Fred’s is to add as many franchised stores as corporate-owned stores, they could double their profit on fees and royalties alone. Fred’s needs to go all-in on this idea.
The SmartCard
Loyalty programs are very important for retailers to ensure return customers. Fred’s loyalty program is a point system in which customers receive a SmartCard. This SmartCard collects points on all purchases made in the store and earns the customer SmartBucks. The SmartBucks can be spent like cash on anything in the store or pharmacy. This is just like what you will find at CVS, which is one of the most successful loyalty programs in the United States. Dollar General, Family Dollar, and Dollar Tree do not have loyalty programs, giving Fred’s an edge.
Expansion
Fred’s is currently in the process of expanding. On top of expanding, they are giving their stores a new look. These stores have new layouts, better lighting, more shelving, wider aisles, and increased signage. Also, Fred’s has expanded their food selections to double what traditional Fred’s stores carry. All of this together gives the stores a higher quality feel and makes for a happier shopping experience.
