Tuesday, July 29, 2014

Growing on Dollar Trees

Profits, they hope, by serving the poor!
The acquisition of Family Dollar by Dollar Tree has created, overnight, an $18 billion 13,000 store powerhouse. This newly combined company has some pretty big implications for not just the deep discount segment of retail, but mass merchants too.
....“This is a transformational opportunity,” said Dollar Tree CEO, Bob Sasser. “This acquisition will extend our reach to lower-income customers and strengthen and diversify our store footprint. Combined, our growth potential is enhanced with improved opportunities to increase the productivity of the stores and to open more stores across multiple banners.”
Why won't the customers just go to Wal-Mart or Target?
Chains from Walmart all the way down to regional players such as Shopko have been chasing these shoppers for decades. As dollar stores proliferated in the 1990s, so did sections within larger stores selling similar merchandise. No name deeply discounted store brands appeared at Walgreens and Walmart to counter those offered at dollar stores.
Even Target succumbed, creating a small area near store entrances with a revolving selection of deeply discounted items in bins.
They would, if there was one handy, but;
...the small stores are easily dropped into urban, suburban and rural communities alike. These units are cheap to build and turnkey operations.
Meet the new Mom n' Pop retailers.

No comments:

Post a Comment