Last Call

Dollar stores are a major player in the retail game.  These stores used to be considered mainly for the lower end of shopping, but after the economy took its toll on middle class consumers, the shopping trends have allowed them to not only expand but offer day to day products such as produce and office supplies.  Their smaller sizes and price tags appeal to folks living hand to mouth as well as shoppers who are looking for a low price on general items, or who miss the fun of harmless trinket shopping in tight times.


In this article, Time explains how Wal-Mart is responding to this threat.  The dollar stores typically do not have enough inventory or selection for customers to do all of their shopping there, but in convenient locations (focused near bus stops or other areas with high foot traffic) they have mastered the grab and go style of shopping that appeals to people on a budget, or in a hurry.  Wal-Mart is responding by underselling the products the dollar stores carry, but the most interesting part is that they plan to start mini-stores to compete with the convenience and locations of dollar stores.  


The CEO of Family Dollar says they live off "the crumbs" that Wal-Mart leaves behind.  An entire industry can survive off of this, and has so far.  Wal-Mart has grown successfully while failing miserably at generating any loyalty of affection from its customers.  It will be interesting to see how this plays out, and how it will affect consumers if Wal-Mart takes over this market as well.