Make Cents? Walmart to Mirror Dollar Store Model

Dollar stores like Family Dollar and 99-cent Only Stores have become so profitable that they're being offered billion dollar buyouts. These stores, along with Dollar Tree and Dollar General, have consistently out-performed many other stores, including retail Goliath, Walmart, whose profits have been declining for the past seven quarters in a row.

It's no wonder then that Walmart is making a bid to win back customers complaining of long lines and poor service by mirroring the dollar store model.While I'm sure Walmart never thought it would have to compete for business with the once-lowly dollar store, it is primarily dollar stores that have lured shoppers from Walmart Super Centers since the recession hit.

Last year, analysts were predicting that dollar stores would lose their new-found customers when the economy started to recover, but those predictions didn't come to pass. In fact, dollar store profits continue to grow, as do the number of stores springing up across the country.

A big complaint with warehouse shopping is that it takes too long to get what you need and get out again, which is one of the reasons people gravitate to Dollar Tree, Dollar General and stores like them.

Walmart's answer to the dollar store is to open "express" stores that are one-tenth the size of its regular stores, so that shoppers can get in and out quickly. The first of these stores will be opening in Gentry, Ark. as early as May, according to Bloomberg Business Week, with as many as 40 mini Walmarts opening in quick succession.

Each of these stores are 14,400 feet in size, about a tenth of the size of a super center, which are typically 185,000 square feet. The express stores will include a pharmacy, fresh and frozen foods and general merchandise in 12 aisles.

The other thing Walmart will be doing that closely resembles what Dollar Tree and 99-cent Only Stores have been doing for years, is to expand its online efforts through "Pick-Up-Today," an article in the New York Times states.

Customers will be able to order from among 40,000 items online, then pick them up at their local store a few hours later. The measure is being implemented to bolster low in-store sales.

Unfortunately, you won't be able to order your groceries in this way, although the company would like to include that service eventually.

It's a great idea because, unlike dollar stores where you buy each online item in bulk, you could buy a single item, say a toaster or a blouse, and pick it up about four hours later. Customers will get a text message or email when their order is ready and, as with dollar stores, shipping to the store is free.

Marlene Alexander is a writer and dollar store diva. She writes tips and ideas for budget home decorating using only items from the dollar store.
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