Discount variety store chains invading New York marketplace

New York City was the home of the famed "69 cent store", which was then followed by "Job-Out". These discount variety stores cease to operate and have been replaced by Dollar and discount variety stores.  

Deal$, the discount chain with more than 180 stores across the United States, has signed a lease for 10,624 square feet at 301 West 145th Street on the southeast corner of Frederick Douglass Boulevard in Harlem. The store is scheduled to open in the spring, sits at the base of The Langston Condominium featuring retail tenants including Bank of America, Starbucks and the New York Sport Club.

Deal$ which is owned by NASDAQ traded Dollar Tree, operated 4,451 stores in 48 states and 5 Canadian Provinces. Dollar Tree, Family Dollar and Dollar General have all grown into dominating dollar store chains. Dollar General is the largest dollar store chain in the U.S. plans

to open 625 new stores this year. Family Dollar is the second largest chain operating around 7,100 stores and plans include opening 450 to 500 stores this year.

Dollar Stores Out-selling Other Retail Sectors A 2011 survey conducted by America's Research Group, reveals that Americans plan to stretch their dollars by shopping at discount chains rather than the pricier department stores and specialty chains, with 753 out of 1,000 survey participants picking discounters as potential shopping destinations.

Britt Beemer, president of America's Research Group, notes that even low price leaders will be faced with intense competition, saying, "Wal-Mart has a new enemy called the dollar store." A study by Colliers International reveals that dollar stores have encountered such fast pace expansion that they are also currently outnumbering national drug store chains.

Marketing Daily reports that dollar store chain reports that its fastest growing segment is customers who are making more than $70,000 per year. Dollar General reposts that wealthy shoppers continue to flock to their stores, making those with household incomes above $70,000 annually the chain's fastest growing customer demographic. Half of the chain's new customers are from non-core, higher income families, with 22.4 percent in the $70,000 or more household category, said Rick Dreiling, chairman, ceo.

Low prices initially are the attraction - the stores sell nearly a quarter of their products for a buck or under - convenience has become more crucial. "We've made a radical shift," said Dreiling. "We proudly sell both national brands and private-label, focusing on everyday necessities at compelling prices. We have a broad selection, but not very deep." Prices usually fall 41 percent under drugstore prices and 22 percent less than grocery store prices, but supercenters typically match dollar stores in cost.

Supermarket News reported that Shoppers are turning more frequently to dollar stores to fulfill needs for items like cleaning supplies and personal care items, according to results of a recent survey Perception Research Services International.

The survey indicated that supermarkets are still where most shoppers (91%) have purchased groceries in the past three months (in line with last year's 92%), and mass merchandisers are still their largest competitive threat (73% purchase groceries there - down from 76% in 2011). But this year's data show that dollar stores are gaining momentum as the percentage of shoppers who purchase groceries at dollar stores has increased, from 32% in 2011 to 35% in 2012. Levels at drug and convenience are holding steady relative to last year, PRS added.

Posted on November 21, 2012 .