Dollar stores have rapidly become a real force in value retailing. Big Lots, more of a true closeout retailer than the current incarnation of dollar stores, may be starting to turn things around after acquiring the Liquidation World chain in Canada. Ironically, the recession — and the slow-paced recovery — gave 99 Cents Only Stores a new lease on life.
Fred’s has been format-fixing, trying to decide whether it is a general merchandise retailer with some pharmacy counters or a drug store with a lot of front-end merchandise. Either way, the company reported a 10.5 percent jump in earnings on a 3 percent sales rise in this year’s first quarter.
Dollar store is a misnomer for the likes of Dollar General, Family Dollar and Dollar Tree. A better description is convenience discounters, since the low unit prices are attractive enough to steal consumer shopping trips from big-box discounters. Dollar General passed the 10,000-store milestone en route to its goal of opening 625 new units this year. Chief competitor Family Dollar is cutting the ribbon on 500 new stores this year, which will give it more than 7,500 by year’s end. Dollar Tree, punctuating a report by Colliers International that there are now more dollar stores than chain drug stores in the United States, is testing a pharmacy counter at one of its Deal$ stores in South Florida.
Food has been a major factor in dollar stores’ ability to lure shoppers, as both Dollar General and Family Dollar re-tool their merchandise mixes to find more room for groceries. Both chains strive to address the so-called “food desert” issue in urban areas while repositioning themselves as “the new general store,” as Dollar General chief executive Rick Dreiling put it.
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