retail news in context, analysis with attitude

The Wall Street Journal reports that “Dollar Tree, Dollar General Corp. and Family Dollar Stores Inc. have been some of the biggest winners during the recession, even as most retailers suffered. And though some luxury shops are now reporting better sales of expensive baubles, analysts are predicting that Christmas 2010 will be another good one for dollar stores ... Among consumers surveyed SymphonyIRI ... 18% of respondents said they planned to shop at dollar stores when buying food and drink for their holiday festivities. (There aren't year-earlier comparisons for the data.)”

According to the story, “The long-term outlook for dollar stores could dim as the economy recovers but the chains are pressing ahead with plans to add hundreds of stores to the thousands that they already have.

“To hold on to higher-income customers, many of the stores have stepped up their game in terms of what's on the shelf and how it's displayed. There's a new focus on nationally known brands and frequently purchased items like snack foods and cleaning supplies.”
KC's View:
As long as dollar stores don’t violate their core value promise, they’ll be able to strategically stretch their muscles. But they have to be careful; it would not take much to disenfranchise the value-driven shopper, and higher income shoppers can be a notably fickle lot.