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Big Lots Will Appeal to Customers with Even More Reasons to Shop
December 1,
2022 by HFBusiness Staff in Business Strategy, Industry 
In a shift in their long-term strategy, Big Lots, Inc. is promising more bargains and treasures for shoppers. CEO Bruce Thorn, on a call with stock analysts, said shoppers are spending less, so Big Lots needs to give them more reasons to come to the store.
The Columbus-based retailer said it plans to bring “more excitement to the store” by increasing the amount of surprising closeout products it gets to its shelves — the “treasure hunt” appeal of shopping its stores.
“Our customer is being pinched. In particular low-income customers who we serve have felt the most pain,” Thorn said. Big Lots hopes that by increasing the number of bargains and treasures — current items like Mattel toys, comforter sets and Black & Decker tools — it can earn those sales back from cash-strapped shoppers.
Net sales fell 9.8% to $1.20 billion in the third quarter, while comparable store sales dropped 11.7% The company also reported a loss of $103 million, or $3.56 a share, in the quarter.
The number of bargains and treasures in stores is up 90% versus third quarter 2021. Those items are taking more prominent space in stores as well, with 90% of endcap displays in stores showing them off compared with 40% of endcaps in July.
The endcaps are part of a bigger marketing push to tout Big Lots’ deals. The company also last month brought in a new chief marketing officer.
“We need to do a better job at communicating unmistakable value,” Thorn said. “We don’t want our customers to wonder if they’re getting a better deal than they would somewhere else.”
Thorn also said Big Lots continues to see opportunity to gain trade-down business, with its private-owned brands across several categories as being key to that strategy. Those brands accounted for 30% of Big Lots sales in the quarter, up from the mid-20s in third quarter 2021.
Other initiatives include eliminating unproductive and redundant products. It also continues to see promise with rural and small-town stores which face less competition and have lower costs to operate and thus are more profitable.
Big Lots expects its fourth-quarter comparable store sales to be down in the low double-digit range.