The Wall Street Journal this morning reports that “the red-hot growth of ‘dollar stores’ is cooling because the format faces tougher competition both from their brethren and other stores that have put in “dollar aisles.” In addition, according to the WSJ, even the dollar stores are seeing sales curtailed because people have less money because of rising gas prices.
Virtually flat same-store sales increases signal that “dollar stores are entering a new phase,” the paper reports. “As its rapid momentum slows, the industry must draw more of its growth from improving the performance of its existing stores.” It also means that dollar store chains may have to slow down their expansion rate as they worry about over-saturation.
Virtually flat same-store sales increases signal that “dollar stores are entering a new phase,” the paper reports. “As its rapid momentum slows, the industry must draw more of its growth from improving the performance of its existing stores.” It also means that dollar store chains may have to slow down their expansion rate as they worry about over-saturation.
- KC's View:
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Everything slows down. Fact of life.
What we thought about when we read this story was the fact that companies like Albertsons made a big deal about installing dollar aisles a few years ago. We always questioned whether this was a good idea, because it meant that these retailers were allowing the dollar stores to dictate the terms of the game, as opposed to emphasizing what makes them special and unique.
