My neighbor called me over a few days ago to check out some of her newest purchases. It was a mixed bag, with everything from candy and gift wrap to Halloween décor and scented candles. As I looked the goods over, she proudly said: “I bought it all in a dollar store. I always thought of those places as junk stores, but it wasn’t anything like that at all.”
I couldn’t help but think about my neighbor as I listened in on Dollar Tree executives on Wednesday at the chain’s annual capital markets conference, which was broadcast over the Internet. At a time when most retailers put the brakes on store expansion, Dollar Tree is forging ahead. Along with such other extreme value retailers as Family Dollar and Dollar General, Dollar Tree is growing its footprint. With 3,717 stores as of Aug. 1, the chain will end the year with about 3,800 stores, expanding its square footage by 6.5%.
"For us, the world's our oyster," said COO Gary Philbin with regards to expanding real estate opportunities. "With other folks canceling deals or cutting back, Dollar Tree is still out there to take advantage and we can move quickly."
On the call, CEO Bob Sasser said the company is betting that the momentum it gained during the downturn will remain in place even as the economy improves. All the evidence -- anecdotal though it may be -- points to the fact that consumers have undergone a change of thinking, he added. Frugality is in.
I think Sasser is right. These are boom times for stores such as Dollar Tree -- and they’re not all that bad for the suppliers who do business with them either.
But I’m not sure I agree with all the experts who say the new frugality mindset is here to stay. Consumers have short memories. What do you think?
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