In a tough economy, every dollar counts. Consumers are scrimping and saving. And when they do spend, they want the biggest bang for their buck. To stretch their budgets, East Valley consumers are visiting discount dollar stores in increasing numbers.
In a tough economy, every dollar counts.
Consumers are scrimping and saving. And when they do spend, they want the biggest bang for their buck. To stretch their budgets, East Valley consumers are visiting discount dollar stores in increasing numbers.
Dollar stores now sell everything from grocery items to children's clothes - at prices much lower than other retailers. People from up and down the economic ladder are finding that shopping at a dollar store is an easy way to keep costs down.
"Thrift is in," said Joshua Braverman, spokesman for Family Dollar Inc., a discount store where 90 percent of the products cost less than $10.
But the trend is not restricted to the East Valley. According to a January 2009 survey conducted by WSL Strategic Retail, a New York-based consulting firm, 60 percent of Americans have shopped in a dollar store over the last three months.
Dollar stores' stigma as dingy knickknack shops is gone. WSL's survey also found that 49 percent of people earning more than $100,000 a year have shopped at dollar stores over the same period. Some of the store's products are generic, but now they sell many of the name brand items that are found at any local grocery.
"We are providing quality to customers without making them sacrifice on the cost," Braverman said.
At the Family Dollar on 1832 W. Broadway Road, Sylvia Morales of Mesa was shopping with her 2-year-old grandson, Dominick. She was impressed by the variety and quality of products on the shelves.
"Before I used to think that a dollar store only sold cheap and tacky things," Morales said. "Then you come here and see there are great products."
Another customer, Daniel Fraklin of Mesa, said the store is his first stop when shopping for soap, toothpaste, or tissue paper. He stops in, he said, a few times every week.
"I'm here so much, I might as well work here," Fraklin said.
Dollar stores have become colossal enterprises. Family Dollar, for example, has a presence in 44 states and more than 6,600 stores.
On the stock market, Family Dollar shares are selling for more than $30 - almost double where it was in January 2008. The uptick is due, in part, to strong sales. Net sales for the second quarter of fiscal year 2009, which ended Feb. 28, rose almost 9 percent to about $2 billion.
The strong showing has enabled Family Dollar to open about 200 stores in fiscal year 2008. The driver of its sales, Braverman said, is food and other consumable items. The store has further plans to expand its food section because of customers' growing interest.
"People come in looking for one item and end up leaving with a basketful," said Judy Verhoeven, store manger of the Family Dollar on Broadway.
99 Cent Only Stores are also expanding due to the rise in thrift. Elsy Guardado, a company spokeswoman, said that more than 50 percent of the stores' product mix is now in the food category.
Finding a way to save on food items is key at a time when the U.S. Department of Agriculture predicts about a 3 to 4 percent increase in grocery prices this year. This comes on top of last year's approximately 6 percent jump.
99 Cent Only Stores have a produce section and sell other grocery items such as milk, eggs and butter. Many customers come into the store to supplement what they purchase at other grocery stores, Guardado said.
The company opened about 20 new stores in fiscal year 2008. Its most recent store is at 750 N. Gilbert Road in Gilbert. Guardado said the store is doing well and that customers from all economic classes are coming in to see "what the buzz is about." With the down economy, they're getting a lot more visitors, she said.
"Customers are looking to save every way they can," she said. "There are other options than the supermarkets. We give people another choice."