Dollar Stores

Dollar stores operate on the principle of high volume and low margin. Once called five-and-dimes, they've been doing business continuously for many, many decades. Always popular, but never more so than in recent times.

Family Dollar Stores, Inc., opened forty-one (41) new stores in fourteen (14) states in a four-week period last November. Do the math, that's ten new stores a week. They now have more than 5,000 stores in forty-three (43) states.

The Cincinnati-based grocery giant, Kroger, has recently entered the dollar store market, opening stores in Houston, Texas, which offer up to 15,000 items at $1 or less. Although operated in retail space owned by Kroger, they have separate entrances and signage. Product staples include food, clothing, greeting cards and party supplies.

According to Chuck Gilmer, editor of the Shelby Report which monitors the grocery industry, grocery store companies, in general, have taken notice of the success of dollar stores and are incorporating the concept in various manners in their stores. Sub-sections offering $1 items are common within large grocery outlets. However, the ability to compete with dollar store chain stores will be difficult since people do not normally associate groceries with dollar stores.

Recently, I was talking to a neighbor about this subject and he said, "You know, there's probably more than a dozen dollar stores within a few miles of my house. They're everywhere and that's good. They sell all the crappy cheap stuff everybody needs." He mentioned that he tried to buy a deck of cards at the mall and he couldn't find anything for less than $2. At the dollar store, he got two for a dollar.

In summary, the convenience of dollar stores, coupled with the availability of all kinds of inexpensive everyday items, gives them a comfortable corner of the American marketplace. Some people have suggested that their success is dependent on a slow economy. This writer disagrees. They may do better in a slow economy, but they'll still do well in a robust economy.