2012 Category Breakdown, Part 2: General Merchandise
Fresh reasons for looking again at that dollar-story strategy
[Editor's Note: In its second-annual category review, CSP takes a look at first-half 2012 sales data to determine how the industry is performing so far this year. In this five-part CSP Daily News series, we look at four major categories. For the complete report, see the September issue of CSP magazine.]
OAK BROOK, Ill. -- The data show motor oil, lighters and internal analgesics are top movers in the genera-merchandise category today. And at least one retailer is finding good fortune in value-priced health and beauty care (HBC) while taking a new stab at dollar items.
What started out as tinkering has turned into what could be an all-out assault on dollar stores.
In an effort to head off a channel bent on selling more convenience goods, John West of Alon Brands Retail looked into toys that could be priced at $1.79 alone or bundled.
"It's starting to generate excitement about new dollars," said West, emphasizing that picking the right items is critical. "We've had tried-and-true novelties with plush toys and bracelets, but we wanted something different."
The renewed interest in dollar items has led the chain to a 23% increase in general-merchandise sales so far this year. Already, West and his team have created five formats for their value-priced sections. One being installed this summer is 20 feet long. A significant rollout in El Paso, Texas, this summer is generating a lot of internal buzz.
"So we're looking at putting a value program in as many stores as we can," West told CSP Daily News. "Low-cost, low-retail [priced] health and beauty works. Our initial start-ups have been very good."
Beyond rediscovering once-stagnant categories, West is interested in diving more into what's hot today. "We neglected energy shots," West admitted, even though SymphonyIRI data shows the category on a continual climb. "We neglected it, took it for granted. We forgot there are other types of products, the calming [products], hangover relief. … We're now taking a look at that."
For an in-depth look at how the dollar-store channel is encroaching on convenience stores, see the October issue of CSP magazine.