Even snobs save at dollar stores

Your Money

October 22, 2006|By Gregory Karp | Gregory Karp,Morning Call

Countless Americans have decorated their homes for Halloween, but many could have received better value for their money if they had bought those decorations at a dollar store.

Holiday decorations are one example of the fantastic buys at variety stores going by such names as Dollar General, Family Dollar, Dollar Tree, Fred's and 99 Cents Only Stores.

"You've got to look around, but you can get a ton of stuff cheap," said Wes Sass, who has self-published a brief guide to dollar stores, Living on 99 Cents.

"A lot of people won't go in these kinds of stores, but they're the same people who complain about how expensive everything is. A lot of people say, `I'm not going in there because all they sell is junk.' It's not true."

Dollar stores have been around for half a century and are a throwback to the old "five and dime" stores. But recently they've become more popular and have become the fastest-growing retail channel in the United States.

While Wal-Mart Stores Inc. added about 600 stores from 2000 to 2004, dollar stores added nearly 6,000, according to ACNielsen, which tracks the industry. And last year, nearly 7 in 10 U.S. households shopped at a dollar store, the research group found.

The top four dollar-store chains have combined revenue of about $20 billion. While that's dwarfed by Wal-Mart's $312 billion last year, three of the dollar-store chains are among America's 10 largest retailers ranked by number of stores.

If you haven't visited a dollar store in a few years, you might be surprised. Cleaner stores, brand-name merchandise, fresh fruit and refrigerated and frozen food are a few of the improvements at many locations.

Make no mistake: You won't find high-end retail fixtures or excellent service. The merchandise likely will be generic and foreign-made, with some brand-name overstocks and closeouts. And items might sell for more than a dollar, despite the store name.

For some people, walking into a dollar store might feel degrading, but the main idea is to give it a try. It's low risk for a potentially high reward.

"I'm not saying you'll never get burned because you might sometimes, but I would just try things," Sass said. He has conducted shopping sprees comparing dollar-store prices with those at full-price stores, and saved 60 percent to 80 percent.

Although we're not advocating doing most of your shopping at dollar stores, here are some of the better buys:

Decorations. Items for holidays, birthday parties and other occasions are especially inexpensive at dollar stores. The selection might be limited but what they have will be cheap, allowing you to buy more decorations for the same money.

Gift wrap and party supplies can be bargains too. Single greeting cards are often 50 cents, compared with $4 to $6 at a regular gift and card store. And boxed cards are even less expensive, averaging just pennies per card.

Toys. Most dollar stores have cheap toys and gifts, which can be ideal for rewards, child birthday party favors, stocking stuffers or even gag gifts for adults.

School and office supplies. Calculators, calendars, composition books, glue, paper, pencils and pens, rulers, tape and notebooks are likely to be far cheaper at a dollar store than at an office-supply store or drugstore.

Cleaning products. Cleansers and detergents are likely to be less expensive, although many will not be brand names.

Paper products. Disposable napkins, paper plates and paper cups will probably be cheaper at dollar stores.

Snacks. Salty and sweet treats, such as pretzels and cookies, might not be from recognizable brand names. But at $1, they're worth trying. Off-brand soft drinks also are available. But if you're devoted to a brand, you can do almost as well if you shop carefully at a supermarket.

Containers. Most dollar stores offer everything from drinking glasses and food containers to vases and plastic boxes. You'll pay a fraction of the prices found at housewares stores.

A note of caution: Be wary of products that might pose a safety hazard. Examples include electrical products, disposable lighters and toys that are choking hazards or have sharp edges.

Know what a good deal is, based on an item's unit price. Wrapping paper is no cheaper if you pay half the price for half as much. Some items are cheaper at a Wal-Mart, Target or a warehouse club where you may already shop.

Most of all, curb impulse spending. A publicly stated initiative for dollar stores is to boost profits by fostering the "treasure hunt" aspect of discount shopping. Don't buy just because it's cheap. Buy because it's a good value.

yourmoney@tribune.com

Gregory Karp is a personal finance writer for The Morning Call in Allentown, Pa.

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