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VALUE TENANTS: Back to basics

Retailers offering more for less are becoming supremely popular tenants. Current trends withstanding, Americans still want a big bang for their buck. How else can you explain the increasing popularity of dollar stores — even among those capable of spending much more? The truth is, these retail concepts appeal across many demographic and income levels. Some value stores are among the top companies in the country. You can find them everywhere from urban malls to suburban neighborhood centers as they continue to expand and prosper. In the following pages five such value stores — Great Clips, Save-A-Lot, 99 Cents Only, Dollar Tree, One Price Clothing — share stories of success.

In an era when many grocery chains try to be all things to all people, St. Louis-based Save-A-Lot continues to refine its limited assortment format. Through this approach, Save-A-Lot stores have achieved fantastic results, while saving its customers a pretty penny. “As an edited-assortment grocery chain, we offer savings up to 40% compared to conventional grocery stores,” says Dan Kimack, corporate communications manager for the food retailer.

Save-A-Lot began its food retail strategy in 1977 with a single store. Today, the company is the 15th largest grocery chain in the United States and the sixth largest under one banner. With estimated sales reaching $4 billion annually, the company is on a growth spurt. “We now have over 900 stores in 36 states and plan to double that number within five years,” says Kimack.

Most of the chain's outlets — 700 at present — are independently operated, the remaining 200 are corporate units.

In every store, emphasis is placed on the quality of the product. The company sells its own exclusive-label products, which are constantly evaluated for grade, taste and value. When all of these strategic components converge — the company's limited assortment policy, the buying power of 900 outlets, and its assortment of name brand products — a favorable light is cast on the retailer by its customers. Why? Because customers are presented with lower prices and are not asked to sacrifice quality. The retailer meets 97% of their customers buying needs through its product assortment, says Kimack.

“Due to our smaller store size (typically 12,000 sq. ft.), buying power and self-distribution system, we are extremely efficient and affordable,” says Kimack. Keeping operating costs below market averages gives Save-A-Lot a competitive edge. The stores reduce operating expenses by carrying one size — the most popular — of each item. The company also keeps costs down by selling its own line of products packaged exclusively for the company. Save-A-Lot orders, receives, stocks and sells its grocery products out of custom cartons shipped from one of 11 distribution centers. Overall, the smaller store footprint and Save-A-Lot product line means shoppers don't pay for excessive overhead or costly inventory.

Within its smaller-than-average stores, Save-A-Lot continues to offer the entire realm of grocery staples — USDA-inspected meat, dairy, frozen foods, fresh fruits and vegetables, household items, pet food, health and beauty aids, and snack food — shoppers purchase most often. Stores typically carry about 1,250 grocery and non-food items.

At Save-A-Lot, the value philosophy can be defined in three words, less is more. While other chains may attempt to provide a shopper with everything they might possibly want, these stores stick to the basics and that has proven a winning strategy.

Contact: Dan Kimack, corporate communications manager, Save-A-Lot Food Stores, 100 Corporate Office Drive, St. Louis, Mo. 63045; 314. 592.9614.

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