Dollar stores thrive in weak economy
Written on April 2, 2009
After a 10,000-square-foot space in the Beach Plaza City Center sat vacant for three years, development company Ashco Inc. finally has a new tenant — the Dollar Tree.
While other retailers have lost income and market share, Dollar Tree Inc. and other dollar store-type retailers are gaining and expanding. Dollar Tree’s 20-year lease for the Jacksonville Beach space, which is expected to open sometime this summer, is one of 210 new stores the company expects to open during its fiscal 2009 along with 50 to 90 that will be remodeled or relocated.
“We’re very excited that we’re able to grow,” said Dollar Tree spokeswoman Shelly Davis. “We are relevant for the times. Who doesn’t like to save money?”
The store will employ about 30 people and will include party, seasonal, health/beauty and food/snacks departments. Its opening follows on the heels of another Dollar Tree that opened on Atlantic Boulevard in February.
During a time when numerous national retailers have been shuttering locations, landlords like Ashco are eager to lease to a retailer that is expanding. “Two or three years ago [some] landlords turned their noses up at those deals,” said Tom Mundy, a senior sales associate at Strategic Sites-Clifford Commercial, who was not involved with the Jacksonville Beach Dollar Tree lease. “But now those types of retailers are doing well and landlords are desperate to get deals done.”
Chesapeake, Va.-based Dollar Tree (NASDAQ: DLTR) operates 3,591 stores in 48 states. Florida is the company’s third largest market with 217 throughout the state, 10 of which are in Jacksonville, Atlantic Beach, Orange Park and Middleburg. In fiscal 2008 the company spent $131 million on capital expenditures opening 231 stores, closing 51 and relocating or expanding 86 free business cards. The company expects to spend even more, between $135 million and $145 million, in fiscal 2009.
Sales for Dollar Tree’s fourth quarter, which ended Jan. 31, were up 6.8 percent to $1.39 billion. Comparable store sales were up 2.2 percent. Sales for the year were up 9.5 percent to $4.64 billion.
Sales plummeted for most retailers during one of the worst fourth quarters and years in decades, but other discount dollar store chains also flourished during the quarter and throughout 2008.
There are more than 8,300 Dollar General Corp. stores in 35 states, including 20 in Jacksonville. Goodlettsville, Tenn.-based Dollar General operated as a public company until 2007 when an investment group acquired the company for $7.3 billion. In the company’s fourth quarter ended Jan. 30, sales increased 11.2 percent to $2.85 billion. Same store sales increased 9.4 percent. For the year sales increased 10.1 percent. Dollar General executives recently announced plans to open about 450 stores in 2009, but declined to comment on the exact locations.
Family Dollar Stores Inc. (NYSE: FDO) operates 6,643 stores in 44 states, including 20 in Jacksonville. The Matthews, N.C.-based company had a net sales increase of 8.7 percent to $1.99 billion during its second quarter ended Feb. 28. Comparable store sales were up 6.4 percent.
Family Dollar spokesman Josh Braverman said with 363 stores at the end of the last fiscal year Florida is the company’s third largest market. Family Dollar has opened or plans to open around 200 stores by the end of the current fiscal year ending in August, including eight in the Jacksonville area.
Filed in: marketing.