Canada: Large retailers go to war with dollar stores
Dollar stores are the fastest growing retail sector in the country currently and are focing many mainstream retailers, such as Walmart, to produce their own dollar offers.
"We’ve got very clear plans in place, and it does spread across the whole store to compete directly with dollar stores," David Cheesewright, head of the Wal-Mart Stores Inc. regional division that includes Canada, said at a conference earlier this year.
Dollar stores are emerging as savvier retail players in their sourcing and breadth of offerings, attracting middle class and even well-off shoppers who once shunned the format, and prompting traditional chains to tout their own dollar deals.
The dollar store concern is real. Dollar store sales are rising by about 9 per cent annually – more than three times the average annual uptick in the overall retail sector over the past five years, according to CIBC World Markets estimates. Dollar store sales will hit $10-billion to $12-billion in a decade from $2.3-billion in 2009, it forecast.
Other retailers, forced to respond to the rise of the dollar trend have produced their own dollar offerings. So far though the success has been limited, its a corner of the market that the dollar stores have a monopoly on.
Even so, mainstream retailers increasingly are trying to emulate the dollar formula. They’re revving up their promotions of their dollar merchandise, often stocking the $1 items in the regular product aisles; they’re developing smaller shops to introduce dollar-store convenience and adding dollar products in more categories.
Wal-Mart also has interspersed a growing number of $1, $2 and $3 items on its regular shelves in everything from home décor to hardware and food products.
"Do we really have an incredible dollar program? We do and we will," Shelley Broader, chief executive officer of Wal-Mart Canada, told the conference.
Source: theglobeandmemail.com
