First-ever Dollar Store Expo garners interest of big and small: New association hints of channel's mounting influence - Market Watch

DSN Retailing Today,  June 10, 2002  by Debbie Howell

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LAS VEGAS -- As one of the fastest-growing retail niches, dollar stores are definitely getting noticed. For the first time, the industry not only has its own trade show, but also a new industry association that debuted at the same time.

Reaction was mixed to the first Dollar Store Expo, held May 15 to 16 at the Tropicana Hotel Convention Center in Las Vegas. Some attendees liked the small venue, which featured slightly more than 200 exhibitors, while others complained traffic was too light. Bentley International Group produced the show, which will be followed by a second event this fall in Atlantic City.

While operators of independent dollar stores were in the majority, representatives of major chains also attended, including Family Dollar, 99 Cents Only, Dollar General, Wal-Mart, Kmart, Ames, Bill's Dollar Store and Walgreens.

"Major players in the industry attended and did business, as well as hundreds of dollar store owners and operators. Being a first-time event, we were very pleased with the end result," said Kristina Mullen, trade show manager.

The Dollar Store Expo marked the launch of the Retail Dollar Association, with a membership drive that kicked off last month and continuing until the fall show. Retailers may join as charter members and suppliers as associate members.

Although traffic at the show did appear to be light, many operators of independent dollar stores were pleased with the venue and found the show useful. Because the expo focused on merchandise that sells for $1, buyers didn't have to sift through the multiprice point merchandise offered at larger shows, such as the ASD/AMD variety and general merchandise show held twice a year.

"I love it. I like the idea of not having to go through a lot of merchandise that's above 99 cents. What I like is the opportunity to get new vendors that I don't normally see," said Pat Korte, owner of Always a Dollar in Oak River, Minn.

Bill Desaulniers, vp of purchasing for LOI Distributing, which operates 30 dollar stores in Washington State, also gave the expo a thumbs-up.

"Overall it was a good show for us," said Desaulniers. "We had been looking for a continuity source of motor oil and were able to find it at the show. We also found a supplier of large bagged snacks with which we were in the middle of negotiating the deal and were able to finalize it at the show."

For larger chains, however, the small venue didn't meet their needs. Buyer Ngam Ratfamy of 99 Cents Only said only about 20% of exhibitors were companies he didn't currently do business with. Ratfamy indicated he probably wouldn't return to the show unless the number of exhibitors increased.

Family Dollar's Rick Siliakus, vp of merchandising, also said he was disappointed with the show and probably would not attend again. "From retailer attendance, I thought it was a poorly attended show. We were probably the biggest fish there."

At a time when many trade shows are struggling from low attendance due to industry consolidation, the debut of the new show drew its fair share of interest. Even a representative of Wal-Mart attended, though the nation's largest retailer hardly fits the description of a typical dollar store. Pete Jason, merchandising director for Wal-Mart's hometown stores, said he was there because many rural stores in his division compete with dollar stores.

"It's a new show so we came to see it," Jason said. "For a first show, I think it offers a lot. It's a nice mixture and I found some interesting things."

Many exhibitors came hoping to break into the dollar store channel. Suppliers of food dominated the show floor, though all sorts of other inexpensive trinkets could be found, from functional items, such as socks and hand tools, to gimmicky impulse goods, such as light-up pens and fake million dollar bills.

"The dollar stores have definitely come of age. They're here to stay. I think there was some question about that 10 years ago," said Alan Robbins, owner of the Great American Jewelry Company.

Robbins, who sells closeout jewelry to dollar stores, said vendors that specialize in serving the dollar store niche are riding the coattails of explosive growth in the segment. His business has grown 20% per year in revenue.

For Lee Pharmaceuticals, more than a third of the company's business is now in the dollar store and convenience store channel, said ceo Ronald Lee. The company already sells to many large retailers, so Lee was exhibiting with the goal of acquiring smaller accounts. On display were packs of lip balm that could be sold under a retailer's private label or Lee's Lip-Ex brand.

Several companies debuted specific packages to target the $1 price point, such as Lesaffre's three pack of yeast, Oberto Sausage's microwave pork rinds, Pennington Seed's birdseed, Unilever/Bestfoods' single packs of Rit Dye and Icco Cheese Company's grated parmesan cheese and bread crumbs.

"Dollar stores are starting to become a bigger segment all the time, while supermarket sales have flatlined," said John Angiolillo of Icco Cheese. "It's an emerging market we wanted to get into."