“the Dollar Store’s Food and Cigarettes Strategy Is Working”

682 Words Dec 10th, 2013 3 Pages
The article is about the variety retail store chain Family Dollar’s approach to increasing sales and competing against not only other variety store retailers’ but against, convenience stores and mega retailers as well. “Last Year, Family Dollar decided it sold enough cheap detergent and school supplies – what it needed was food and cigarettes. Its research found that many of its customers smoke, and smokers tend to make frequent trips to buy cigarettes – maybe they’d pick up some groceries and whatnot while they were there. Food is also something people buy frequently, so the combination hopefully would boost traffic.”(BusinessWeek.com/Articles/2013-10-10/the-dollar-stores) The discount variety store teamed up with McLane, a grocery and …show more content…
There research has shown that “the chain’s typical tobacco sale is $13, and about 60% of shoppers who buy tobacco spend an additional $4 worth of goods, that’s a boon says COO Michael Bloom for a store where many items are $1 or less, and most items are less than $10.” (BusinessWeek.com/Articles/2013-10-10/the-dollar-stores)
Last Wednesday the company reported that there consumables category, which includes food and tobacco increased 16.9% to 7.5 Billion in the 12 months ended in August. Had they been wrong, who knows how adversely this strategy could have been to the company. Appealing to smokers and using there needs to smoke and buy other consumables is a risky approach considering how many people feel about the adverse effects of tobacco.
When I saw the strategy and approach I was intrigued. I have never been a smoker and I have never shopped at any dollar store including Family Dollar. I always looked at them as a novelty supplier, I never knew they carried these types of products or the type of assortment listed in the article. By really focusing on their customers, and there needs to purchase certain consumables, and to purchase them often, I can see how Family Dollar can be extremely successful. By competing at the price level for products they can put dents in revenues streams for mega retailers Wal-mart and Kmart. By offering these lines of products and be

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