subject: What's The Right Format for Those Running a Dollar Store? [print this page] What's The Right Format for Those Running a Dollar Store?
In today's challenging retail environment selecting the right store format is important. In fact selecting the right format is just one more task to perform early-on in the planning and preparation process. After all, those running a dollar store must make the right decision regarding their final store choice or all is in jeopardy. Is it to be a $1 price-point store, or a dollar plus store, or a general discount store? Each has specific requirements. Each will appeal to a slightly different shopper. In this article I present some of the pros and cons associated with each of these options.
$1 price-point store
There was a time when the most common dollar store format was the $1 price point. In fact consumers became conditioned to expect $1-only pricing whenever dollar store was in the name. As business costs have risen, profit margins have tightened. With those diminishing profits has come the need to carefully investigate and understand exactly what it takes to achieve profits if running a dollar store at the $1 price point. On the other hand, don't forget many shoppers are conditioned to expect $1 and will be willing to travel longer distances to reach your $1 price point store.
Dollar plus store
More and more dollar store owners are embracing the dollar plus format. They recognize total sales can be reduced when margins are improved by following the dollar plus store format. Better profit margins - yes. The challenge is to position your dollar plus store to be accepted in the community. With the right marketing the dollar plus format may be the best option.
General discounter
If $1 price point nor dollar plus format appeal, yet you desire to be in the low-cost, discounter realm, then maybe a discount store is for you. Total price may be higher, but if you aren't an excellent wholesale buyer with good suppliers the profits can be small or even non-existent. On the other hand, the opportunity can be outstanding. You can offer name brand products at deep, deep discounts from the general retailer right down the street.
There are clear differences such as merchandise suppliers when moving from $1 price point to $1 plus format. The same holds true with general discounting. Carefully investigate each option under consideration. Be sure you understand the pros and cons, and then make the format decision that works best for you and your customers.
