Posts Tagged ‘Dollar Tree

21
Jan
10

The Giving Tree

I’ve never really been a dollar store head. I really don’t even like looking around inside…I’m sure it has something to do with the song selections played over the sound system which every store seems to share, and that emanates just loudly enough to dispel the awkwardness of scavenging the cheap candy isle in complete silence–but never loudly enough to actually catch your attention–or with a playlist that seems to include every awful American Idol-sponsored single ever recorded.  However! Every so often I will visit the local Dollar Tree to  peruse the aisles myself and scoop some cheap office or shipping supplies, but I’ve never really relied on the store as a staple of my shopping repertoire.

That is, until a few weeks ago I found myself standing face to face with the California redwood of Dollar Trees. I had stumbled across the national headquarters, located in Chesapeake, VA.  My experience there actually inspired me to do some research on the history of the dollar store phenomenon. Because, honestly, “in today’s economy”–as the phrase that has been tirelessly employed  as an obligatory disqualifier to any salty fellow’s aspirations to earn a decent paycheck for the next however-many decades goes–what type of retailer can afford to sell each and every product within its walls for $1.00 and still operate as a successful franchise spanning 48 states?

We’ll start with a quick profile of the giving Tree.

Dollar Tree Inc originates back to 1953 when a man named K.R. Perry opened a store called Ben Franklin in Norfolk, Virginia, that sold goods for 15 cents. Over the next three decades the company diversified its products. By 1986, Dollar Tree Inc had garnered a loyal consumer base and established a new dollar-limit discount store called Dollar Tee. By 1995 Dollar Tree stocks were being traded on NASDAQ.

How does a dollar store work?

  • They buy in bulk from the surpluses of manufacturers who make less expensive items than their competitors and sometimes have trouble clearing their inventory.
  • They often make deals directly with the manufacturer to do things like absorb shipping costs in order to buy goods for pennies on the dollar.
  • · They provide variety, along with the attractive pricing gimmick to encourages impulsive buying
  • · They train their employees to perform a wider area of duties than the average salesperson
  • ·They often rent in less-desireable locations and keep shorter operating hours than other retail stores
  • They’re expert niche marketers. Where else can you find as plentiful a selection of sturdy porcelain cherubs, snowmen around Christmas time, turkey figurines near Thanksgiving, or black cats popping out of pumpkins in October?
  • They specialize in cheap party gifts and favors that are generally much more expensive at party stores but essentially just at disposable. Who wants to pay more than they have to for party streamers?

So amidst a recession, a store like Dollar Tree, which last year, according to Time magazine, saw its annual profits rise 51% to $56.9 million during the quarter ending in August, is profiting from more cost-effective retailing. An economic slump has positioned Dollar Tree as an easy and popular go-to for goods and groceries that help people save money. The chain’s hefty profits have simultaneously allowed for expansion in its products, and continue to draw consumers away from traditional big-name retailers and into the Dollar Tree.

During my latest visit to the aforementioned Dollar Tree superstore, I came across a few items that I feel are worthy of widespread publicity… Or at least a few comments on this blog.

Check it out.

(left) Yep. That’s a Dollar Tree brand pregnancy test. $1.00

(right)  The cheapest brand that Walmart has to offer, First Reponse, which runs for $10.56

I bought this hardback written by Award-winning author Eugene Linden from the Dollar Tree.  $1.00

Amazon.com has the paperback version priced at $24.14. And for a used copy?  $2.71


The cheapest picture frame I could find on Walmart’s website is $9.00.

You could find a smaller, cheaper one elsewhere, but less expensive than Dollar Tree’s assortment of $1.00 frames?!

A personal favorite here. 8 for $1.00 at the Dollar Tree.

Lets just say that the two-packs in the vending machine in the lobby of my dorm are $0.85 each.

So you get the idea. Go green in 2010.

Dollar Tree Inc (NASDAQDLTR) is an American chain of Discount Stores headquartered in Chesapeake, Virginia and operates 3,591 stores in 48 U.S. states. Every item sold in the stores is offered for either $1.00 or less, thus making it a true dollar store.

Dollar Tree competes in the dollar store and low-end retail markets with the national chains Family Dollar, Big Lots and Dollar General together with regional chains such as 99 Cents Only Stores, Fred’s and many independent dollar stores nationwide.

Dollar Tree has recently expanded into the grocery business further with the addition of frozen foods and dairy at some stores. Products include milk, punch, pizza, ice cream, frozen dinners and pre-made baked goods.

Another expansion is their purchase of the Deals chain of stores. Deals stores sell items up to $5. Although they still have many dollar items, the addition of items up to $5 allows them to sell a larger variety of items including frozen and other foods at low prices.




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