DATE=08/12/03

TYPE=English Feature

NUMBER=7-37740

TITLE=Dollar Stores

BYLINE=Ted Landphair

TELEPHONE=619-3515

DATELINE=Washington

EDITOR=Faith Lapidus

CONTENT=

/ / ATTN: BUSINESS, TRENDS, AMERICANA / /

INTRO: One dollar. A buck. A greenback. It's the basic unit of American money. One dollar does not buy much in most stores these days. But VOA's Ted Landphair reports American shoppers by the millions are bargain-hunting in what are called dollar stores.

TEXT These stores -- with names like Dollar General, One Dollar Deals, Dollar Tree, and Cindy's Dollar Store -- are the nation's fastest-growing retail segment.

Many resemble Said Karkas's tiny Dollar Shop in a poor Washington, D-C, neighborhood. He sells most items for a buck, or two for dollar, or three for a dollar to low-income consumers who are living paycheck to paycheck. ///////BEGIN OPT Mr. Karkas, who once ran a flower shop with his father in his native Morocco, moved to the United States twelve years ago. He washed dishes at a big hotel, saved his money, and -- a year ago -- started the Dollar Shop in what had been a dingy little clothing thift shop. It is one of more than one-hundred twenty-five dollar stores in the Washington area. END OPT//////

CUT ONE KARKAS :31

We have, like, underwears and T-shirts and toys and school stuff and cleaning stuff -- oven cleaner, and bathroom cleaner, and for laundry. And birthday stuff, too, because too many people, when they have a birthday [to buy for], they don't want it to cost too much money. You come into the dollar store everything is one dollar. Like ten stuff is ten dollars, you know. I make money, I have kids here with my wife. I open dollar store. Now everybody wants to open a dollar store! [laughs]

ANCR Many of those new stores are small independent businesses like Mr. Karkas's Dollar Shop. But there are also plenty of gigantic dollar stores that are part of chains. Two of them -- Dollar General and Family Dollar -- are opening more than one new outlet a DAY.

Another, called 99-Cents Only, has 167 locations from Texas to California. Its president, Eric Schiffer [pron: SHIFF-er], says the company founder once ran a small shop that sometimes offered big discounts on products he obtained from companies that had over-produced. He sold them for a dollar-and-a-quarter, a dollar-fifteen-cents, even 99 cents.

CUT TWO SCHIFFER :11

And he noticed that 99 cents -- something seemed magical about that price point. Stuff just flew out of the store. Sales just took off. So he thought, 'Maybe you could have a store, and everything could be 99 cents.'

ANCR Now everything IS at the 99 Cents Only stores.

CUT THREE SCHIFFER :21

How we do it is, we buy in very large quantity. We pay our bills faster than anybody else. If manufacturers want us to take an extra truckload at a certain time of year to level our their production, we're happy to do it. And we don't have to carry every single brand. We can focus on a few of the major name brands and create a much bigger display of it and sell a lot of it.

ANCR Many 99 Cents Only outlets thrive in upscale malls or stand-alone locations in wealthy neighborhoods. Mr. Schiffer says the average store grossed five million dollars last year. The most successful sits one block from swanky Beverly Hills in Los Angeles. It yields almost ten million dollars a year.

CUT FOUR SCHIFFER :19

The biggest reason why people who are more upscale try the store is that they say to me, 'We've driven by that store for years and never thought it could have anything for us. But finally I got so curious what all these Mercedes-Benzes and Porsches and BMWs in the parking lot, I thought I'd check it out myself.'

ANCR Why would someone who could afford to pay two, three, or ten times as much for a product buy it at a dollar store? According to Michael Solomon, a professor of human behavior at Alabama's Auburn University, these stores have overcome the stigma of low-class places selling shoddy merchandise that no one else wants.

CUT FIVE SOLOMON :40

You have to remember that people shop for a variety of reasons. You lose sight of the fact that only a small proportion of shopping is done because we have a task to do. Shopping provides a social function. For some people, it's an adventure. For some people it's a sport. It really is part of the thrill of the hunt and being able to tell your friends that you procured a great bargain in one of these places. [/////BEGIN OPT Wealthy people are certainly not shopping exclusively at these stores. What they're doing is freely moving back and forth between the very upscale stores and these bargain stores and taking pride in the fact that they're able to do that. END OPT/////]

ANCR Twenty-three-year-old Ako Mizasawa [OKK-oh Mizz-oo-SAW-wah] of Houston, Texas, is certainly not wealthy. But she's describes herself as a dollar-store junkie -- almost obsessed with the adventure of finding new things.

CUT SIX MIZUSAWA :13

You can buy ANYTHING there! Presents for your teachers or your friends or your co-workers. I could spend hours in there. And they actually even have them in Japan. But they're not a dollar store. They're hundred-yen stores.

ANCR Retail Forward, a consulting and market-research firm in Columbus, Ohio, recently published a report about the dollar-store phenomenon. Its author, Sandra Skrovan [pron: SKROH-van], says a number of factors are fueling the phenomenal growth of dollar stores.

CUT SEVEN SKROVAN AND REPORTER :33

[SKROVAN] Kind of a sustained, weakened economy. Consumers are looking to stretch every dollar. Consumers are looking for more efficient shopping trips, where they can get a lot of things done in one stop.

[REPORTER] What's the impact of these stores on the rest of the retail segment, on drug stores, on department stores, and even on the Wal-Marts and Coscos and Target discount stores of this world?

[SKROVAN] Supermarkets and even Wal-Mart are adding sections in their stores that are specifically quote-unquote 'dollar store-within-a-store' sections.

ANCR Ms. Skrovan says the new breed of dollar stores, that are bright, clean -- even carpeted -- are taking a bite out of other retailers' profits. One example: Their share of the greeting card business has almost doubled to thirteen percent in three years.

But retail trends are notoriously cyclical. In the middle of the twentieth century, neighborhood five-and-ten-cent stores like Woolworth's and Kresge's -- stocked with inexpensive, often imported, goods -- were a mainstay of the U-S retail economy. Today, they've all but disappeared under the onslaught of huge discounters like Wal-Mart that offer everything from ice cream to vacuum cleaners in one location. It remains to be seen if the dollar-store boom will continue if the U-S economy improves and if stores like Wal-Mart fight back successfully with their own dollar sections. [signed]

Neb/tl/fil