"We're taking a new concept," owner Jay King told the newspaper. "We're going [image-nocss] to have all the items that a normal convenience store has at a good price. Then we're going to have hundreds of items at a dollar. We hope it's going to be something new."
A c-store at the same location was open for 20 years before it closed down in March because of a lack of traffic, King said. It opened up last Thursday with a variety of merchandise ranging from makeup to paper plates to cookies and candy.
King opted for dollar pricing because of the economy, he said.
"If you look at the economy and you look at all industries, dollar stores are up. I said, 'We need to look at that'," King added. "I couldn't believe when I got into it everything that you could buy for a dollar."
National Retail Federation (NRF) media relations manager Kathy Grannis said that discount and dollar stores have been seeing a good share of consumer shopping with consumer spending dropping and buyers seeking bargains. "I think even as we do start to come out of this, consumers will still be wary about how they send their dollars," Grannis told the paper. "Before the recession, it was a lot easier to spend on any discretionary purchase. I think the economy has caused us to really look at how much they're saving and how much they're spending."
King is no stranger to the c-store business. "I opened my first store up in the west end [of Gastonia] in 1978," he told the paper. King now runs 14 convenience stores and plans to open another dollar c-store in Ranlo, N.C., in about 45 days.
"I've got some dollar items in all my stores now," he added.
If things go well, King said he will be even more vested in the dollar store concept.
The dollar store sector overall has been doing well during the recession. Last Friday, Dollar General Co.'s fiscal-second-quarter profit more than tripled on higher margins and an 8.6% jump in same-store sales as consumers continue to trade down for basic staples, according to a Wall Street Journal report.
The discount retailer also announced plans to increase store openings and remodelings-relocations by 50 each to 500 and 450, respectively, the report said. That boosted Dollar General's projected capital spending for the year by $50 million to as much as $325 million.
The quarterly results were much better than rivals such as Family Dollar Stores Inc. and Dollar Tree Inc., which have also been benefiting from the economic downturn, the Journal added.
Dollar General, which is owned by buyout firm Kohlberg Kravis Roberts & Co., is poised to return to the public market through what may end up as the largest U.S. initial public offering (IPO) of stock by an operating company this year.
Chairman and CEO Rick Dreiling said the company's most recent results reflect consumer response to store changes and its ability to grow.
Dollar General, based in Goodlettsville, Tenn., had 8,577 stores when the fiscal second quarter ended July 31.
For the most recent period, the company's profit surged to $93.6 million, compared with $27.7 million a year earlier. Revenue climbed 11% to $2.91 billion. Gross margin rose to 31.2% from 29.1% amid higher average markups and more sales of private-brand items.
Chesapeake, Va.-based Dollar Tree's earnings rose 51% in the company's fiscal second quarter ended August 2. Charlotte, N.C.-based Family Dollar said last week that net sales for its fiscal fourth quarter ended August 29 rose 2.6%, while comparable-store sales rose 1%.
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