The Dollar Store. Today’s Current
Version of the Discount Department Store
By: Edwin L. Crammer CPA – In every generation there is a different type of discount retail store that is popular with the buying public. It all started back in the early days of the last century with the so called five and dime store. The largest and most famous chain in this type of store was “W.J. Woolworth” every big city had many of these store, selling retail goods of all types at a highly discounted price.
Woolworth was the biggest of these types of stores and they were so successful that they built a skyscraper in New York that at the time housed the National Headquarters of this company. That skyscraper is still there today and even though the Woolworth chain has long gone from the horizon, the building is still called the Woolworth building.
My first experience in visiting a Woolworth store was when I was eight years old. At that time I still lived in England and yes there were Woolworth stores in England at the time, albeit only a few. This one was in Blackpool a resort town on the west coast of England. This store located on the main street facing the ocean was huge. I remember being fascinated by this store that had lots of goods for sale and so inexpensive. Being located in a resort town the store had a large selection of resort items with a many items available at little cost for a little tyke like me to play with on the beach.
When I immigrated to the United States several year later, I was pleased to see Woolworth stores all over the place. Over the subsequent years as I grew up and was able to get around on my own, I frequented these stores often and took advantage of the low cost of the items that they had for sale. Alas, these stores are now gone, but not for long.
In the sixties and the early seventies the discount store revolution was all the rage in this country. In fact I personally was employed by two of the national chains of discount department stores in their advertising department during the early years of my advertising career. These two chains, namely “Two Guys from Harrison” a New Jersey headquartered company and “Arlan’s Departments Stores” a company that had its roots in Massachusetts but moved those roots to New York City.
These two chains along with other similar organizations sprung up all over the United States and for a while, gave the major department store chains that were not discount organizations a run for their money. In fact during this era several well known traditional department store organizations found they could not compete and folded up their operations.
The stores that opened up as discount department stores chains were able to sell their goods cheap because they bought most of their merchandise overseas from manufacturers that utilized cheap labor. The era of this type of store lasted ten or twelve years, as there was outcries from the general public as to how these stores obtained their merchandise, and also as to the quality of the merchandise offered these store slowly began to fade from the horizon.
Filling the gap from the absence of these types of stores, Wal-Mart type stores opened up all over the country. Wal-Mart, a chain of stores headquartered in Arkansas and was founded by Sam Walton. Their original claims were that everything that they sold in their stores was made in America. That is not so much today, as their stores do import goods from overseas.
The way Wal-Mart was able to sell goods so cheap was that they would strong arm their vendors into selling goods to them at penny’s on the dollar profit margin. The stick was that if they sold enough goods those pennies would add up. In addition, they were not known to pay their vendors invoices quickly sometimes taking up to sixty days to honor an invoice. Their purchasing power was so high that some vendors only dealt with Wal-Mart and therefore, if Wal-Mart decided to go someplace else, these vendors would be out of business.
Over the last twenty years or so, a new type of discount organization has sprung up. It started out as small mom and pop types of stores and they all followed the same theme. “Everything in the Store for a Dollar'”. Most of the merchandise sold in these store was of low quality items that they had purchased from a number of vendors whose name was not familiar to most of the customers. A lot of this merchandise was merchandise whose sale date had expired though it was still usable but maybe not the same quality as this was when it was originally manufactured. Some of this merchandise was purchased from companies that had to liquidate their merchandise in order to pay down their debt. Anyhow, most of the items offered in these stores was of low quality that did not compete with merchandise sold in other venues.
In the last few years, a number of chains have sprung up devoted to the sale of Dollar merchandise. These new stores offer a large variety of merchandise, mostly home goods. Very few of these items are sold for a dollar, but the majority of the merchandise sold in these store are very inexpensive and at a higher quality than those goods sold in the early incarnation of this industry.
It seems at least for now, this is today’s version of the discount department store. However, unlike the type of discount store of the sixties and even the “Wal-Mart” type of store that is still showing a growth spurt these types of stores offer a smaller variety of goods for sale. Will they succeed in the long term? Who knows, but I have heard from some sources that in some areas of the country these types of stores are cutting into the sales of “Wal-Mart”.
You may contact Edwin L. Crammer at: Edwin@edwinlcrammerpa.com
You Heard it Here First! Do not be surprised a year and a half down the road from now, when you find out that the next Republican candidate for President in 2016 will be, none other than Mitt Romney. Richard Nixon did it way back then, after being defeated by Kennedy. He came back and won two terms.
Just think of it a Presidential race in 2016 when the two opposing candidates will be, Hillary Clinton who was beaten by Obama and Mitt Romney who also was beaten by Obama. Interesting thought.