Not “the Dollar Store,” but the concept and changes taking place in that genre is the focus of TC’s pondering. Read on! – the editor
Recently I was stunned by the announcement that after approximately 40 years, the Only 99-cent Stores, would be starting to wind down business and close its 400 locations, including over a dozen here in Las Vegas area.
Being well versed in closing stores, including locations of the Warner Bros Studio Stores and the Discovery Channel Stores, I have been on the receiving end of bad news —with offers to be compensated to stay until the end. So, with ample extra severance and bonus, had the “opportunity” to watch the stores I worked so hard at, decline and eventually be emptied.
I Feel Ya…
I felt what the many employees of 99-cent Stores are feeling now—blindsided and betrayed. Stores that are so busy (plenty of customers so that wasn’t the issue). It seems weird for such a nose dive, but I’d say the writing has been on the wall for a long time.
Maybe it’s the semantics…
What’s in a name? Well, for sure, it is hard to maintain a 99-cent store when costs go up. Scale and volume can help with this. But to compete merely with the volume of locations (and coast to coast locations)? Well… not likely sustainable.
Case in point, the recent announcement of a 1000 closures of Family Dollar and Dollar Tree stores during the next 2 years. The economics of scale were a strong point when the acquisition by Dollar Tree of Family Dollar happened a few years ago. These guys have been keeping up with the number one behemoth— Dollar General.
In fact, I joked when I was visiting family in New Jersey a few years ago when I noticed Dollar General stores dropping almost every few miles, more so than usual culprit, Wawa.
Dollar Tree is failing because of its ties to the former business model… The everything $1.00 model. It is now mostly unattainable.
Dollar Tree is failing because of its ties to the former business model: The everything $1.00 model.
The base minimum price at its namesake stores has been $1.25. That helped a little bit. The main feature they did was adopt a similar business model to Family Dollar/Dollar Tree, or even Dollar General, that a dollar is the starting point, and a state of mind.
…a dollar is the starting point, and a state of mind…
Hence that is why Dollar General has been very successful and giving retail stalwarts, even Walmart, a run for its money.
Circling back to the almost late victim to the current retail environment. 99-cent Stores have not been at that price point for a long time. 15 years ago they raised prices .0099 so all base items were 99.99 cents. Basically rounded up to $1.00. This aided the product mix to resemble a mini grocery store, with produce, dairy, bakery and frozen items.
In Las Vegas, this was a great place to shop for basics without breaking the bank. To some, this is another food desert life line that will be exterminated. Dollar Tree and Dollar General could relieve some of the gap, especially is Dollar General opens more of its Market concepts. Due to rampant shrink all over the country, I don’t believe they will take the risk.
That’s a Wrap…
I already miss the 99-cent Stores. I haven’t been in one in many moons, and it was the best merchandised dollar store around. I hope someone picks up this slack. This demise will impact many (in fact, more than anyone will know).
Thanks for reading and hanging out with me!–TC
Bonus Clips…
99 cent Store Sadness
Dollar Tree
—30—
Interesting quotable: “the sector is “very focused on having a highly curated range” of products.
This curation or selection process is generally called “range planning,” and it appears to be a crucial factor in how discounters plan to drive demand and control inventory going forward…”
https://www.retailbrew.com/stories/2024/04/16/discount-chains-tweak-product-mix-to-drive-demand-control-inventory