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‘Dollar Stores’ still faring well

BY MICHELLE BORYCA | JUNE 25, 2009 7:21 AM

Iowa City resident Lori Skoff is well-aware of how much further her money can go by shopping at the right places. She admits she’s a frequent shopper at Iowa City’s Dollar Tree and Dollar General.

Skoff’s favorite purchases are the “knockoff pull-ups” for her 4-year-old. The graduated diapers would cost her nearly $17 at a retail chain, but she only pays $7 at the local dollar store.

The selling point for discount variety store Dollar Tree, 16461⁄2 Sycamore St., is simple: beating the economic recession by offering items for $1 or less before taxes.

The Dollar Tree has existed for more than 20 years, and the company went public more than 13 years ago. Everything in the store has been $1 since it opened, said Shelly Davis, a company spokeswoman.

“We’re right for the time, we’re relevant, and people like to celebrate life’s occasions while saving money,” Davis said. “Who doesn’t like to save money?”

The Dollar Tree has more than 3,600 stores in 48 states. And on May 27, one company figure showed a 38 percent increase in earnings per share in the first quarter, Davis said.

Dollar General, 41 Highway 1 W., is its only competitor in town. A company official could not be reached for comment.

Dollar Tree has four foundation categories: health and beauty, seasonal, party, and food, Davis said. Aside from child necessities, the store is Skoff’s choice for party essentials. Whether she needs one-time use cupcake trays or plates and napkins, she doesn’t feel guilty when buying from the Dollar Tree.

“It’s cheap,” said Skoff, who goes to discount stores two to six times every month. “When you have to entertain, it’s easy because you can get more for less.”

But she admits the dollars add up fast. In a typical trip, she said she ends up spending $25 to $50 depending.

Even so, the savings keep people coming back.

“In times like these, when the economy is not doing well and people are being laid off, people will substitute cheaper and lower quality things for more expensive things,” said John Solow, a UI associate professor of economics.

He understands how dollar stores such as the Dollar Tree can get away with the $1 price tag — because dollar stores sell those products, their business is bound to rise, he said.


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