Frankly Speaking

September 16, 2011
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The Evolution of Dollar Stores...What Can You Learn?
Back in 1993, I was going through a very painful and very costly divorce. Money was extremely tight, what with paying attorneys, counselors for the children, rent on a new place and a mortgage on the old. Anyone who’s been there knows what the picture looks like.

So, as people do, I cut back on as many expenses as possible while also holding down a full-time job and one, or sometimes two, part-time jobs.

When my children (then 4 and 8 years old) were with me, I still wanted to be able to give them treats, yet the budget didn’t allow for frills. Luckily, I discovered what was then a new type of store in our suburb, a dollar store.

I’m not sure what that first dollar store I encountered was called, but I know it has evolved into a Dollar Tree today. It reminded me of a smaller version of the old five-and-dimes like the Woolworth’s and Kresge’s of my youth.

It became part of our Sunday ritual; if my children had been good, we would go to the dollar store on Sunday and I would give them each $2 to spend on two items of their choosing. They quickly became very discerning shoppers, deciding some things weren’t worth a dollar. I remember my son telling me a VHS tape of cartoons made in Romania wasn’t very good, for example.

They also realized that something they saw one week might not be there two weeks later, so if they wanted it, they should buy it, probably exactly the reaction the store wanted.

As they shopped among the toys, children’s books and stuffed animals, I would allow myself $2 as well, buying kitchen gadgets (I was so short of money at the time I had stolen a can opener from our office kitchen rather than buy one), holiday decorations to brighten up our tiny efficiency apartment, and multipacks of candies like 3 Musketeers and Hershey’s chocolate bars that are staples of my diet.

In the years since, my finances have improved considerably, no thanks to Wall Street these days, but I’m still a dollar store shopper and have been amazed at the evolution they’ve undergone.

No longer do they have merely the hit or miss conglomeration of goods we saw in 1993. Increasingly, they are moving into food, putting in freezers and refrigerated cases. They offer groceries such as paper products and cleaning supplies.

Our cover story this issue looks at Family Dollar, one of the dollar store trendsetters when it comes to private label. Can other retailers learn private label lessons from dollar stores? We think so; read our cover story to find out what those lessons are.

We also bring you our new technology report this issue; you can use it to decide which of the many technologies being touted for retail will actually help your private label sales.

Enjoy. And, also, please don’t think about stocking any cartoons made in Romania.

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