Wal-Mart Tests Dollar Store Within a Store

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Aug 02, 2002
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Wal-Mart Stores is testing an in-store “dollar store” in which existing merchandise that sells for a dollar or less is grouped together in a separate section, reports The Wall Street Journal. “A number” of stores have such sections, including stores in Charlotte, N.C., Laredo, Texas, and Baltimore, Md., says Wal-Mart spokesman Tom Williams.

SunTrust Robinson Humphrey analyst Patrick McKeever say shares of several dollar-store retailers fell earlier this week – and did worse on a relative basis than other retail stocks – on concern over Wal-Mart’s moves, which have been detailed in several research notes since Tuesday.

Family Dollar Executive Vice President George Mahoney says he expects the smaller size and neighborhood locations of the Charlotte chain’s stores will be differentiating factors to the in-store dollar stores being tested in Wal-Mart’s large stores.

Moderator Comment: What do you think of the dollar store within a store concept? Do you think Wal-Mart is testing the in-store dollar concept in advance of launching its own dollar-stores?

Wal-Mart is not the first to test this concept. Ames
Department Stores has a section called ‘Dollar Bargains’ in all its 327 stores.
Because of the targeted income demographic, this concept isn’t going to be for
everyone. We can see it working very well in stores such as Wal-Mart, Kmart,
Duckwall-ALCO and Ames, to name a few. [George
Anderson – Moderator
]

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