Wednesday, November 7, 2012

Family Dollar turns to 'sin items' for growth

There was an interesting story in Forbes on Tuesday about Matthews-based Family Dollar's increasing reliance on so-called "sin items," such as cigarettes, to sustain growth in the face of fiercer competition.

Family Dollar cigarette display
Since the recession, Family Dollar and its competitors, such as Dollar General and Dollar Tree, have enjoyed a major period of growth. Their sales have soared to record levels, they've added thousands of stores, and they're preparing to open thousands more over the coming years.

The reasons behind the dollar store boom are myriad. There are more people in poverty or struggling, and there are more people willing to "trade down" the stores they shop at to save money. The dollar stores have added better-quality items, and thousands of different items such as food, to drive repeat trips. Larger discount competitors, such as Wal-Mart, stumbled, and with more locations, dollar stores benefited from being closer to home in an era of rising gas prices.

But now, competition is heating up, especially from Wal-Mart. The world's largest retailer is opening more small-format stores, and that means dollar stores have to come up with more ways to lure customers. Enter alcohol and tobacco. As an analyst is quoted saying in the Forbes piece: “Any time you’re selling liquor or tobacco, it’s another reason to go into the store, (they're)...addictive repeat purchases.”


7 comments:

Anonymous said...

So we can now expect to see in Charlotte CATS buses with alcohol ads dropping off passengers in front of Family Dollar stores selling beer, wine and tobacco products. So much for the "Family" in the name.

Anonymous said...

@9:31 what does taking a bus to Family dollar have to do with the word Family in the name of their business.
What does alcohol ads on a bus have to do with the word Family int eh name of a store?

If you don't think the name "family" is appropriate fora store that sells beer and tobacco just make it about relevant information.
Personally, I could give a rip what they call it "Family". Most people can figure out if they want to shop there or not based on if they have a personal rule about not shopping at stores that sell beer and cigarettes. It must be hard to buy food and gasoline for people that have that rule...

Anonymous said...

Gee, our beloved Harris Teeter, Food Lion, Walmart and pretty much every other retail chain have been selling 'sin' items for years. Way to try make a non-story into something conteversial to try to get page views.

Anonymous said...

Gee, the beloved Harris Teeter, as well as pretty much every other retail chain has been selling 'sin' items for years. Way to take a non-story and try to make it conteversial to generate page views.

Anonymous said...

Gee, the beloved Harris Teeter, as well as pretty much every other retail chain has been selling 'sin' items for years. Way to take a non-story and try to make it conteversial to generate page views.

Tammy said...

Dollar stores have a distinct advantage because they maintain smaller facilities and are right in the local neighborhood. People can buy gifts, cards, basics and more in a budget-conscious environment. But I had no idea they were starting to sell cigarettes and alcohol.

J said...

One thing you can always count on here in the Bible Belt is people saying hysterical, nonsensical things about consumer products they do not consume but feel it is their personal, God-ordained duty to prevent others from consuming.

Fundamentalist nut-cases crack me up. When I moved here in 1988, I remember seeing a news story about a group of people trying to start a lottery in NC. a fundamentalist nut-case was mugging for the camera and claiming that instituting a lottery was the first step to a Mafia takeover of the state.

You don't want to consume cigarettes or alcohol? Fine. But try to maintain some semblance of logic in your argument.