Dollar Stores Doing Big Business

Chains are adding local stores as part of a national expansion based upon bargain-hunter appeal—and improving their look and merchandise in the process.

History is repeating itself, with a mixture of the general store and the “five-and-dime stores” of the past resurging—albeit with some new twists.

Dollar stores, carrying a wide variety of discounted items from food to clothing, are becoming the new “general stores” in Alachua County, reflecting part of a national trend toward convenient neighborhood shopping.

Dollar General is up to 12 stores in the county, including ones in Gainesville, Archer, Hawthorne, High Springs, Waldo and the Jonesville area. In addition, the Dollar General distribution center in Alachua is a major source of employment. Family Dollar has nine stores, including ones in Gainesville, Archer, Hawthorne, High Springs and Newberry. While Dollar Tree, which has three stores in Gainesville, falls into the dollar-store category, it has a much more limited group of merchandise than Dollar General and Family Dollar.

Although their prices are low, their impact is great. Building the new stores added construction jobs, and the stores provide employment, says Seth Lane, an agent with Front Street Commercial Real Estate Group and a member of the Gainesville Development Review Committee.

“The dollar stores have been the only new commercial buildings we’ve considered in the past two years,” he says.

Dollar Store Economy

Nationally, Dollar General has 9,900 locations and is adding more than 600 this year, says Tawn Earnest, a spokeswoman for the Tennessee-based company. North Carolina-based Family Dollar totals 7,100 stores, and it’s adding 450 to 500 this year, says spokesman Josh Braverman.

If this isn’t indication enough, an August article in The New York Times Magazine stated, “We are awakening to a dollar-store economy.”

Although 42 percent of the stores’ customer base earns less than $30,000 a year, 22 percent of Dollar General’s customers earn $70,000 or more, according to Richard Florida, director of the Martin Prosperity Institute at the University of Toronto, in a February article in The Atlantic. “Long popular among the poor, the Great Recession has been a boon to dollar stores, bringing in a whole new wave of customers,” Florida writes.

Whether this is true for Gainesville is less clear.

Convenience is King

Beyond savings, convenience is driving customers to Dollar General, Earnest says. “People want to be able to get in and out quickly. We’re ‘America’s general store,’ where you can do no-fuss shopping for life’s basic necessities.”

In addition to increasing their locations, both Dollar General and Family Dollar are broadening their appeal.

Dollar General has been upgrading the look and convenience of its stores since 2008, Earnest says. “We’ve improved our signage and placed items that are akin to each other closer together. The shampoo is near the hair brushes.”

Dollar General also has improved the quality of its private-label products to be close to the quality of name brands, Earnest says.

Family Dollar is in the midst of a makeover that has evolved during the past five years, Braverman says. “We didn’t just improve our physical plant. We also improved our culture of customer service.

“It starts with saying ‘Welcome to Family Dollar. Can I help you with anything?’ It ends with saying ‘thank you’ at the register,” he says.

Customer Ed Ruben noticed the difference when he and his wife and son shopped at the Family Dollar at 5007 NW 34th St. in Gainesville recently.

“I was impressed by how many name brands there were,” Ruben says. “Things were very reasonable. It’s worth it to us just to get the savings on detergent.”

Family Dollar slowed its expansion from 2007 through 2010 so it could invest internally, Braverman says. It switched out its computer system with the goals of speeding restocking of stores, providing greater training of employees and freeing up managers to spend more time on the floor.

Click here to continue reading

Pages: 1 2

Related posts