For Kingman shoppers, having lots of dollar stores makes sense
Consumers remain budget-minded in the wake of the Great Recession
KINGMAN - Sam Bender drove in from Peach Springs to shop for groceries at Basha's on Route 66 and stopped by the Dollar General store to pick up a few more items on his way home.
"I can find items a lot cheaper and faster," Bender said. "It's more convenient to find items here than at Basha's and the price is a lot less."
He's also shopped the Family Dollar store on Northern Avenue, which he said is not much different than Dollar General.
The proliferation of discount retailers such as the Family Dollar store being built at John L Avenue and Route 66 shows that consumers are entrenched in budget-minded shopping in the wake of the Great Recession.
Family Dollar is building its third store in Kingman with an expected opening in early 2015, company spokesman Cliff Cermak said. Family Dollar also has a store in Golden Valley.
Charlotte, N.C.-based Family Dollar, with more than 8,000 stores nationwide, faces stiff competition in Kingman from other discount retailers such as Dollar General and 99 Cents Only stores.
Dollar General has three stores in Kingman, including one on Route 66 about two miles from the Family Dollar under construction, and one in Golden Valley.
The typical Family Dollar store is about 7,500 square feet and employs eight to 10 workers, company spokesman Cliff Cermak said.
"Family Dollar is really excited to open this new store in Kingman," he said. "As a whole, Arizona has been a great state for us and we look forward to continued growth there."
The property developer is Hutton Growth One, a Charlotte, N.C.-based investment firm that purchased the 1.4-acre corner parcel for $72,183. Discount Sign was issued a permit for one pole sign and three building signs valued at $7,000.
Cermak said he did not have an estimate for the total cost of construction and Hutton did not return calls for comments.
Family Dollar's core customer is female and head of the household and makes about $40,000 a year. Its fastest-growing customer segment makes more than $100,000 a year, so it's not necessarily the lower-income bracket that shops Family Dollar, Cermak noted.
"Regardless of demographics, our customer is in search of value and convenience on popular name brands and quality private brand merchandise," he said.
To enhance value and convenience for customers, Family Dollar this year added more than 300 new food items, lowered prices on hundreds of items and offered to match competitors' advertised specials, Cermak said.
Dollar General recently made an unsolicited bid to acquire Family Dollar at $80 a share, about $3 more than the current trading price.
Family Dollar rejected the offer. However, Dollar General stated in September that it remains committed to acquiring its competitor and is confident in both its antitrust strategy and analysis performed by antitrust advisors.
Jaclyn Dees, spokeswoman for Goodlettsville, Tenn.-based Dollar General, said she couldn't speak in terms of competition due to the ongoing acquisition efforts. As far as store locations, she said the company looks for opportunities to bring value to customers in small towns.
"The No. 1 thing we look at is meeting our customers' needs, to serve everyone within three to five miles or within a 10-minute drive," Dees said. "We also factor in demographic trends and traffic patterns."
Dollar General has more than 11,500 retail stores in 40 states, making it the largest discount retail chain in the United States.
Dollar stores reflect a growing national trend, said Gary Jeppson, economic development director for the city of Kingman. They seem to perform well regardless of the state of the economy.
"I believe such stores will do well in a robust economy as well as in tough economic times," he said.
Ruben Flores of Kingman doesn't think there are too many dollar stores. He's shopped at the 99 Cents Only store when it was packed with customers lined up at the register.
"I know these dollar stores, for people on low incomes, it's a dog send," Flores said, adding that he doesn't believe in God.
Flores said he usually shops Smith's or Safeway because they have more variety and selection. However, for coffee, mouthwash and plastic bowls to feed his cats, he went to Family Dollar on Stockton Hill Road.
Not every item is cheaper at the discount stores. For instance, Flores said he went to Dollar General and found cat food was $1.50 more than it was at Walmart. The main reason that he doesn't shop Dollar General, though, is because he lives downtown and there are no stores nearby.
Is that a blip we just heard on Dollar General's radar screen?
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