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[10 comments]

It's Twinkies time at Big Lots

February 11, 2014

Back in 1970, my friends and I lived a preteen dream. Summer days were spent lounging on the banks of a slow moving river, lazily tossing our fishing lines into the water, not caring much what we hooked. Some of my fondest memories of those days were the stops we would make on our walk to the river at what my grandmother named "the day-old bread store" but everyone else called the thrift store. There we would buy a big box of cupcakes, fruit pies or other sweet baked treats to tide us over as we angled July and August days away. This trip down memory lane was sparked by the announcement that Big Lots has been named the Official Hostess Thrift Outlet.

Yesterday, along with Hostess, the discounter announced it would begin selling Twinkies, CupCakes, etc. at its stores at up to 40 percent off suggested retail prices. Hostess closed its 600 thrift stores as part of a cost-cutting measure.

"The Thrift Outlets were extremely popular," said Big Lots CEO David Campisi in a statement. "We are thrilled to team up with this iconic brand and give customers a new destination to find outstanding savings on the products they know and love."

"It's a win-win," Chris Boring, principal of Boulevard Strategies, told The Columbus Dispatch. "I don't think Hostess was necessarily the most-nimble retailer. They had some class-C locations, whereas Big Lots has some excellent locations. Right there, you're getting an upgrade. Plus, Big Lots is a professional retailer — that's what they do."

[Image: Big Lots Twinkies

Big Lots has launched a social media campaign called #thriftisback to promote its effort. Two videos to promote the retailer's position as the "official Hostess thrift outlet" began running on YouTube yesterday. The company is clearly hoping the videos will go viral to help its new venture take off online and in its stores.

"There is a tremendous hunger for the Hostess brand and for saving money at Big Lots," said Andy Stein, chief customer officer for the chain. "We plan to welcome Twinkies in a big way."

FINANCIALS:     [NYSE:BIG] [ ]

Discussion Questions:

Do you expect success from Big Lots' partnership with Hostess? How important will social media be to the ultimate success or failure of Big Lots as the "official thrift outlet for Hostess?"

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How important will social media be to the ultimate success or failure of Big Lots as the "official thrift outlet for Hostess?"

Comments:

Big Lots needs to blast the doors off the social scene and get the Millennials totally absorbed on Hostess "high-health" products.

Great move by Hostess and Big Lots. Will add to the nations healthcare costs - but hey - Twinkies are America.

Grabbin' a Twinkie for breakfast!

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Tom Redd, Vice President, Strategic Communications, SAP Global Retail Business Unit

Yes. There is a tremendous Hostess/Twinkie following. As noted, Hostess was a marginal retailer at best. This decision should drive traffic to Big Lots, enabling the retailer to sell additional products beyond the beloved Twinkies.

The social media campaign makes sense. It gives Big Lots a more contemporary image as well as extend its appeal to younger consumers.

Should be a win/win for both parties.

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Richard J. George, Ph.D., Professor of Food Marketing, Haub School of Business, Saint Joseph's University

Big Lots is always looking to fill their shelves with a deal of some kind for the constantly migrating bargain hunter crowd that they refer to as "our" customers. Hostess on the other hand is simply trying to put their product where it will be seen and hopefully sold. This move will perpetuate the alienation of other retailers that have discovered by way of the closing and subsequent reopening of the company that the loyal Twinkies fans are now labeled as the few.

Any company looking to "cut costs" is having sales issues and is in need of reform. Hostess has been able to provide the market with good product for a long time. They have updated with new product when the money supply permitted this to happen. What the company has not done well in a long time is to create a positive partnership with retailers throughout the industry. This is most evident in the convenience stores where their product is either not available or hard to find.

Hostess needs to rethink and revamp their market plan to reignite the passion for their products they think exists.

'gjarnoldjr'

Very crafty move by both parties. Other value channel retailers must be scrambling to find similar arrangements. Glad to see the "stale store" going away. Just don't know why it took so long for someone to figure out that this makes sense.

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Dan Raftery, President, Raftery Resource Network Inc.

The thrift store concept should work well with the Big Lot customer base. My question is, how will all the existing Hostess retailers and wholesalers feel about a new competitor whose mantra is price?

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Steve Montgomery, President, b2b Solutions, LLC

Clever move for both parties. Hostess significantly simplifies its operations by stepping gracefully out of the retail business, while gaining a larger distribution footprint. Big Lots adds an extra "destination factor" for shoppers that should help drive visits and basket size.

Promotion via social media is a natural part of this mix - particularly for younger consumers. Boomers like me are already imprinted on the brand, so all they need to do is put those creme-filled treats on display and let impulse take over.

Thinking about grabbing a Twinkie with lunch (alongside my kale salad).

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James Tenser, Principal, VSN Strategies

If they're going to be available everywhere, but at 40% off only at Big Lots, why tick off the hundred thousand or so other outlets that will be asked to carry them? I humbly ask. Going after the youth market is good; the Boomer generation is already sold. And it's still a huge market.

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Warren Thayer, Editor & Managing Partner, Frozen & Refrigerated Buyer

It's a smart move. Hostess should not be in the real estate and retail business. Discount chains are an organic retailer for the "the day-old bread store." It's an even better deal for Big Lots since it will provide them a point of differentiation amongst the discount chains.

Social media will help, but it will not be needed for the success of the partnership since Big Lot's customers will provide the necessary traffic.

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Carlos Arámbula, Managing Partner, MarcasUSA LLC

None of my kids have ever had a Twinkie. That said, I was asked to repeat "play" several times after all four came into my office yesterday after hearing the "Twinkies Time" YouTube video. One of my kids, who has also never visited a Big Lots store, asked if we might go to visit a local store, "Just to check it out." Big Lots may be on to something with this creative.

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George Anderson, Editor-in-Chief/Associate Publisher, RetailWire LLC

Ate Twinkies, Cup Cakes, Fruit Pies, Snoballs, et al as a child and visited the Detroit-area Hostess Thrift Shop a time or two. From a distribution channel standpoint, this arrangement seems to make sense. What I don't like about the Big Lots/Hostess "Thrift Shop" brand is that it has a brand connotation of "day old bread." Perhaps that is one reason that Hostess was reluctant to reopen its own chain of Thrift Shops.

Not saying this branding issue can't be solved but I think it is important for any food-related business to stress freshness and healthiness as major brand components. This could be an even more valuable relationship if they are able to dodge the day-old branding issue.

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Larry Negrich, Vice President, Marketing, nGage Labs

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