Family Dollar Stores to become Grocery Stores

[monsoon]

Charlotte based Family Dollar Stores has announced they are going to start selling groceries in their stores. They are in the process of getting a reader so they can read the food stamp cards and fitting their stores to sell groceries.

I find this announcement interesting as some of their stores are pretty small and crammed full of stuff. In concept they are going to be like a mini-Super Walmart. It's also interesting that a lot of their stores seem to be located in a strip mall with another grocery like FoodLion. They will not be in competition with them instead of directly complimenting each other.

[StevenRocks]

Family Dollar sounds like it's going a similar route as Dollar General, which offers an aisle or two of food in most stores and has recently started opening grocery-store sized Dollar General Markets with a very Supercwenter style layout and merchandise selection.

[nowensone]

Yes, depending on the definition of "groceries", they've been doing this for some time with a few isles of basic commodity type items (crackers, basic spices, pasta noodles, generic canned goods) in addition to toiletries and their usual main stays. But it appears that they are beginning to sell groceries "for real", as I assume was what metro was really referring to, in perishables (produce, etc.) and frozen foods.

I hope this does not turn out to be a bad decision for Family Dollar, freezers and perishable goods introduce a new level of expense to a store, in equipment, utilities, space needs, and employee experience/knowledge. I often do shop at Dollar stores for certain things that are commodity items where quality is largely homogenous, I might do so for produce as well if it was quality, but at some point these little stores will become as packed as Walmarts, in a quarter of the space, and therefore too packed for me to bother with. And if they build bigger stores, well, at some point they won't be able to charge a dollar anymore, and then they start looking a lot like a "regular" low-tier store, and lose their niche demographic.

[monsoon]

The rent at most places where family dollar tends to locate tends to be on the low side. Maybe they could rennovate some of the closed Winn Dixies.

[DigitalSky]

It would be nice if they could take over some of those still-vacant Winn Dixies and eliminate some eyesores.

[BobbyRobert]

its a good decision from a revenue standpoint. FD stores generate substantially higher revenues when they sell milk since that allows them to accept EBT (the modern equivalent of food stamps). This simple change generates substantially more traffic and does cause a significant bump in the sales of their traditional product line. The numbers are so good that FD is likely to reduce the amount of floor space devoted to soft goods.

I am glad to see this change, FD has been experimenting with EBT for quite a while but has been reluctant to spend the necessary cash to install coolers and the EBT infrastructure. This reluctance has been in spite of them knowing that it is a strong revenue producer.

[StevenRocks]

The rent at most places where family dollar tends to locate tends to be on the low side. Maybe they could rennovate some of the closed Winn Dixies.

I think that's the direction they're headed in. Those Winn-Dixie stores typically had cheap leases, and FD could potentially make some decent proffits with food and general merchandise in combo stores.

[MZT]

I have vowed to never again buy refrigerated items at Dollar General, after getting spoiled food twice. (I suspect they are using cheap, poorly refrigerated deliveries.)

Yes I know we're talking about Family Dollar. My point, is that bottom rung merchants can be so cheap and sloppy, that by experience they convince people not to use them for anything but canned goods and crackers.

[NCMike1981]

Family Dollar will probably just get a few coolers in allowing them to sell things like frozen dinners and milk. You know they won't get a produce section or deli or anything like that.

[peaceloveunderstanding]

I think they will provide an alternative to convience stores rather than grocery stores.

[StevenRocks]

Family Dollar will probably just get a few coolers in allowing them to sell things like frozen dinners and milk. You know they won't get a produce section or deli or anything like that.

Don't rule it out. Dollar General has this stuff in some locations these days.