Dollar Stores Reap the Benefits of Private Brand.

This article published today, Monday, June 08, 2009 in the Texas daily the Lubbock Avalanche-Journal takes a look at dollar stores, Dollar General specifically through the life of one customer.

Generics become popular option
As an out-of-work brick layer, Gilbert Figueroa said he’s having to cut back on his expenses.

Holding sacks of groceries in front of Dollar General at 19th Street and Avenue W, he said he’s been shopping at “dollar stores” more in recent months, trying to save money on food and other groceries he’s found to be “way cheaper.”

Figueroa said he can’t afford to fix his broken-down car – though he is saving money on gas – and appreciates the convenience of walking to the Dollar General a few blocks away from his home.

But he said there is a limit on where he’ll cut back – buying toilet paper.

“When you buy cheap toilet paper, you’re not going to get the same results you’re going to get from a good toilet paper,” he said.

Figueroa is one of the many people in Lubbock and across the country looking to save money during hard times. Some people are buying more generic products, shopping at “dollar stores,” or doing home-improvement projects themselves instead of hiring them out.

He said he knows he’s been directly affected by the national recession that slowly crept into Lubbock.

“Nobody’s buying any houses any more,” he said explaining why brick-laying jobs have been harder for him to find in the city in recent months.

Though Figueroa exaggerated a bit – as home sales are down 16.2 percent, but not out, according to the latest Lubbock Economic Index for April reported May 27 by Lubbock National Bank – he’s still out of work.

Shopping for generic products and discounts from retailers such as “dollar stores” has been increasingly popular in recent months, as indicated by sales reports from discount retailers.

For Dollar General, sales increased 15.7 percent to $2.78 billion in the 2009 first quarter compared to the 2008 first quarter, according to a report released last week by the company. Same-store sales increased 13.3 percent for the quarter.

And Dollar General plans to build about 450 new stores and remodel or relocate another 400 around the country, though Dollar General spokeswoman Tawn Earnest said she did not know the company’s plans for expansion in the South Plains. Through May 1, the chain opened 104 new stores, remodeled or relocated 100 and closed four stores in fiscal 2009.

Other “dollar stores” such as Dollar Tree and Family Dollar are reporting similar increases in sales and plans for expansion this year.

Earnest said Dollar General recently relaunched its store brand, Clover Valley, in response to consumer demand for cheaper groceries at a lower cost than national brands.

Specifically, she said, demand for “consumables” – anything from dish soap to graham crackers – has grown in recent years.

Signs advertise more than 200 new food items offered at the Family Dollar at 34th Street and Avenue S.

Mark Montez, walking from Family Dollar with a bag of groceries, said he occasionally buys a bag of chips or noodles from the store. But he said he prefers to do most of his food shopping at traditional grocery stores such as United Supermarkets.

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