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More and more dollar stores are popping up

TAMPA

When talk turns cheap, frugal is smart and dollar stores rule. • There may be a new one on your street. An Internet search finds 70 stores in a 10-mile radius of downtown Tampa, including 39 Family Dollars, 15 Dollar Trees and 15 Dollar Generals. • Nationally, these top three players opened 1,470 stores last year. • About four per day. • Credit a sluggish economy, or loyal customers as a Dollar General spokeswoman says, and the results are a boon for dollar stores with no end in sight. These legacies of the five-and-dimes pop up along bus routes and wedge into spaces between stores such as Walmart and Target. • Most now sell frozen and refrigerated foods, plus tobacco and alcohol, and accept food stamps. They say what they really sell is convenience. • But, as with big-box stores, some neighborhoods roll up their welcome mat when a new store comes. More than 830 people opposed a store in Seminole Heights last year on a "No Family Dollar" Facebook page. Neighbors said the store didn't fit in with the neighborhood that loves its locally owned businesses. • That store is now open.

Nearby, at another Family Dollar that opened last year on N Dale Mabry Highway, Tammy McGregor recently rolled a cart with tomato soup, a doll and laundry soap. She picked out no-show socks and then red licorice.

The people who run Family Dollar think of people like McGregor when stocking their stores. She's their target market: a single mother in her 40s making less than $40,000 a year. To focus even more, one Family Dollar store — officials won't say which — tracks shoppers' moves through the store by following their phones' Wi-Fi signals.

McGregor often stops by twice a week, she said.

"It helps me get through my week," she said. "I can buy anything here."

• • •

Customers waited for the doors to open at a new Dollar General in Riverview earlier this summer. The first 50 were handed $10 gift cards and the first 200 also got a tote bag filled with free stuff. Some grand openings become a ballyhoo, with people setting up tents and forming lines around stores, said Crystal Ghassemi, Dollar General public relations manager. The stores are often the only food market in small towns.

The Riverview store is Dollar General's only planned location this year in Hillsborough County, Ghassemi said. There are 25 here already, 10 of those within the city of Tampa.

"Our real estate department looks at traffic patterns and demographics," Ghassemi said. "We build stores in a 3- to 5-mile radius or within a 10-minute drive."

She said customers are loyal and typically come from a household making about $40,000 a year, although many make $20,000 or less. Food stamps account for about 5 percent of sales. In recent years, the store has stocked wine and beer. Tobacco is also in the works. It also offers its own private label, a name-brand equivalent called Clover Valley.

"We hang our hat on value and convenience," said Ghassemi of the company, which will turn 75 next year.

Dollar General, with 10,600 stores nationwide, is the largest dollar store chain, although it's no longer technically a "dollar" store. Less than 25 percent of goods sold at Dollar General are a dollar or less. Family Dollar sells about 28 percent of its items for a dollar or less. Only Dollar Tree sells everything in the store for a dollar or less.

Over the last decade, Family Dollar has worked to improve product quality, add national brands and make stores brighter and cleaner, said spokeswoman Bryn Winburn. "No clutter in the aisles. Friendly employees."

In 2005, the stores started selling food, and recently have added name-brand products such as Breyers ice cream and Gorton's fish sticks, Winburn said. The store started accepting food stamps in 2008 and last year started selling tobacco products. Now, it's testing beer and wine sales in some stores.

• • •

Saving money can be universally appealing.

Dollar store growth isn't solely due to a faltering economy, said Ghassemi, who believes a significant portion of customers at Dollar General are well off.

Family Dollar shoppers are similarly spread across income brackets.

"We believe there has been a structural change to the U.S. population as a result of the great recession, and people now view the way they spend money much differently. It's en vogue to save money," Winburn said.

One way dollar stores deliver is by keeping costs down. They buy bulk and spend very little on advertising. Customers can pick up a flier in the Sunday newspaper, or in the front of the store or go online and print a coupon.

Dollar Tree advertises online ideas for teachers and the "dollar tree bride" touting suggestions for favors, decorations and party games, such as making a "toilet paper wedding dress."

Dollar General offers recipes online such as a layered Mexican casserole, Coca-Cola Chicken Wings and Lucky Charms cupcakes.

As incomes rise in a sunnier economy, market analysts speculate on whether the fresh polish on dollar stores will keep consumers.

But the battle continues for our dollars from these stores, traditional grocers and Walmart neighborhood markets.

And for now, it's the savvy shopper who wins.

Elisabeth Parker can be reached at eparker@tampabay.com or (813) 226-3431.

More and more dollar stores are popping up 08/16/13 [Last modified: Friday, August 16, 2013 7:20pm]
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