In today’s inflationary environment, dollar stores should appeal to price-conscious consumers. I have to assume that discount supermarkets like Walmart and Aldi have hurt dollar stores. And the channel does not seem to have closed the gap with the enormous advantages of c-stores in terms of location, convenience, food service, fuel, product assortment and clean, well-lit stores.
Ten years ago, Dollar Tree outbid Dollar General in the battle for Family Dollar, paying $8.5 billion for what was once the largest dollar store chain. Now Dollar Tree wants to sell what has become a burden on its shoulders.
(Read more: CSN EXCLUSIVE: Discovering Opportunities in Closed Dollar Store Locations)
According to a former dollar store customer quoted in a CNBC report, “They lost track of who exactly their customer base was.” She claimed dollar stores had gone up in prices and they were struggling with chronic understaffing and expired goods on the shelves. “Every day you had to maneuver around boxes in the aisles and the items weren’t placed where they were supposed to be,” she said.
I remember it was only a few years ago, on a News from the convenience storeIn a roundtable discussion with retailers, convenience store owners expressed concern that drugstores have become a more women-friendly place where they can conveniently purchase all kinds of c-store items, from cold drinks to candy and snacks, and in some stores, even sandwiches.
Today, drugstores have largely abandoned some of the c-store categories — most notably tobacco — as they have focused more on becoming wellness centers. Now, drugstore giant Walgreens is planning to close numerous stores. Its CEO said the retailer expects weaker consumer spending for the rest of the year. The chain could close as many as 25% of its 8,600 stores. Meanwhile, its main competitor CVS has been closing stores since 2021.
The lesson for convenience store retailers is: Don’t get too comfortable. Things could change quickly, as they did at dollar and drug stores. Complacency is the enemy of progress.
Smart c-store retailers are already developing strategies to defend themselves against the next threat to their business. What do you think that will be?
