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As one of the fastest growing dollar-store chains, 99 Cents Only has become a model for some best practices in the single-price retailing niche, particularly in the hot growth category of food. President Eric Schiffer spoke with DSN Retailing Today on Oct. 25 about some key issues in the dollar-store channel. Schiffer will take over as ceo in January when current ceo and founder Dave Gold steps aside.
DSN Retailing Today: The growth of dollar stores and other extreme-value formats has been phenomenal in recent years. To what do you attribute this success, and why are these formats resonating so much with shoppers today?
Schiffer: In general, I think the growth of dollar stores has done well because everybody likes a bargain. I think people today realize more than ever that just because something has a low price tag doesn't mean that it's not good quality. I think people more and more understand you can get good quality for a lower price.
DSN Retailing Today: So you think that's translated into a lot of reception and customer affinity for the format today?
Schiffer: That macro trend just made it more acceptable for middle-income folks to shop in dollar stores.
DSN Retailing Today: What do you believe are some factors that have enabled 99 Cents Only to be so successful?
Schiffer: I think our store format is unique and different from any other dollar store in the country. We were the first store in the country to sell everything for the single price point of 99 cents or $1 and we opened in 1982. That's what our founder Dave Gold's vision was, to have everything in the store priced at 99 cents.
The thought when we opened was, "Why can't you have a discount store look like a beautiful market?" The store would be filled with items people needed, as opposed to knickknacks. He realized it would cost more in labor to have a beautiful store, but he believed that the more beautiful the display looked, the better it sold, and that sales would come along with that. That's part of the reason why if you look at our average sales per store last year, the average was $4.9 million.
A key is also that...