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Family Dollar Stores Inc. (FDO - Analyst Report), the operator of self-service retail discount store chains, announced a multi-year agreement with Coinstar Inc.’s Redbox.

Family Dollar’s buyer-centric approach, which along with its sustained investment in the multi-year ‘Project Accelerate’ initiative, is enabling the company to offer more choice and variety to its patrons. ‘Project Accelerate’ involves specific initiatives to improve category management, optimize prices and properly plan its merchandise and assortment.

The company’s agreement with Coinstar basically furthers its buyer-centric approach. As per the deal, Family Dollar locations across the U.S. will feature Redbox kiosks providing shoppers the convenience of accessing entertainment at great value.  

Redbox, with more than 30,000 locations, provides customers a quick and affordable way of renting the latest movies on DVD as well as family video games.

Family Dollar’s strategic initiatives have clearly been successful, since the company has seen sustained growth in its top and bottom lines. The company remains committed toward better price management, cost containment, effective inventory management, private label offering, expanded operating hours and merchandise initiatives that are expected to drive both sales and margins.

Earlier, the company entered into a multi-year deal with PepsiCo Inc. (PEP - Analyst Report) for selling Pepsi’s beverages. Prior to the agreement, Family Dollar offered PepsiCo’s brands, including Gatorade, Frito-Lay and Quaker products.

However, with the new agreement in place, Family Dollar gained access to other popular brands like Mountain Dew and Sierra Mist sodas, Aquafina water and Lipton tea, which is expected to drive top line growth.

Founded in 1959 and headquartered in Matthews, North Carolina, Family Dollar Stores operates a chain of self-service retail discount stores in the United States. It offers general merchandise in four categories: Consumables, Home Products, Apparel and Accessories, and Seasonal and Electronics. The company operates a chain of 7,200 general merchandise retail discount stores across 45 states.

Currently, we maintain our long-term Neutral recommendation on the stock. Moreover, Family Dollar shares maintain a Zacks #3 Rank that translates into a short-term Hold rating.

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