Dollar stores making inroads

By Patt Johnson
Des Moines (Iowa)Register

Most, but not all, items at Family Dollar store sell for $1 in Des Moines, Iowa. Such dollar stores garner a strong following from low-income households. Gannett News Service

Dollar stores — no-frills, low-overhead shops that sell brand-name and off-brand merchandise for $1 to $10 — are garnering a strong following, especially among cash-strapped moderate- and low-income households.

Store names tell the story: Dollar General; Dollar Tree; Dollar Zone; Family Dollar; Deals, Nothing Over $1; Dollar Warehouse; and Dollar Deals. Another low-priced retailer, Big Lots, offers deals on closeout items priced as high as $50.

In Hawai'i, stores such as Price Busters and Marukai Corp.'s 99 Cents also have popped up.

"As a retail channel, dollar stores are one of the fastest-growing in terms of sales," said Todd Hale, senior vice president of consumer insights at ACNielsen, a market research firm.

Nationally, sales at dollar stores are growing at a rate of 10 percent to 12 percent a year, compared with 2 percent to 4 percent at grocery stores, Hale said.

"There has been a rapid store expansion in a number of the larger dollar chains," Hale said. And the stores are moving from smaller, rural locations to metropolitan areas, he said.

Brenda Campbell said she relies on dollar stores for many of her basic supplies, such as shampoo, cleaning supplies, paper goods, toothpaste, greeting cards and other items.

"I am in one of these stores at least once a week," said the real-estate agent in Norwalk, Iowa.

Similar in stock, the stores sell a variety of snack and boxed foods, canned goods, cleaning supplies, gift wrap, greeting cards, housewares, hardware, health and beauty aids, paper goods, clothing and shoes, home decorating items and seasonal merchandise.

Last year, the North Carolina-based Family Dollar opened 529 stores across the United States and has plans to open 575 more this year, said George Mahoney, an executive vice president. Mahoney attributed the success of Family Dollar and other dollar stores to people demanding more for their money.

"The reason why this niche is doing so well is a combination of very good values of basic, everyday goods and prices as sharp as the prices of any retailer," he said. Family Dollar stores also are in more neighborhoods than conventional discount stores, he said.

Roberta Pophin and her mother, Lucille Culbertson, shopping at a Family Dollar in Des Moines, Iowa, weren't concerned about the business mumbo jumbo that drives sales at the dollar stores. They were looking for good products at good prices.

"Their prices are all right on some things, but some things I can buy cheaper at Wal-Mart," Pophin said.