Variety store

Economics

Some items are offered at a considerable discount over other retailers, whereas others are at much the same price point as conventional retail establishments. There are two ways variety stores make a profit:

Variety stores with single price points buy products to fit those price points (while making a profit) that are:

Not all variety stores are "single price-point" stores, even if their names imply it. For example, in the United States, Dollar General and Family Dollar sell items at more or less than a dollar. Some stores also sell goods priced at multiples of the named price and, conversely, multiple items for the price. The discrepancy with the nominal price is also compounded if sales tax is added at the point of sale.

Supply

In many countries, stock can be imported from others with lower variable costs, because of differences in wages, resource costs or taxation. Usually goods are imported by a general importer, then sold to the stores wholesale.

Another source of stock is overruns, surplus items and out-of-date food products. Real Deals, a regional dollar store in the Syracuse, New York area, is stocked almost entirely with surplus goods such as these. The legality of selling out-of-date goods varies between jurisdictions: In the US it is legal, but in the United Kingdom it is illegal to sell goods after their "Use By" date.

Demography

Although some people may link variety stores with low-income areas, this is not always true. For example, Atherton, California has a variety store within its city limits, even though it has a median household income of nearly $185,000 a year. Studies of food discounters in Great Britain show quite a varied demographic, and 99p Stores reported an increase in higher-income customers after the financial crisis of 2007–08.

The concept of the variety store originated with the five and ten, five and dime, nickel or dime (15 cents), and ten-cent store or dime store (10 cents), a store offering a wide assortment of inexpensive items for personal and household use. The originators of the concept were the Woolworth Bros., in July 1879. Woolworth Bros. later became F. W. Woolworth Company or just "Woolworth's." On June 21, 1879, Frank Winfield Woolworth opened his first successful five-cent store in Lancaster, Pennsylvania, after a failed attempt with a store he opened on February 22, 1879, in Utica, New York. Frank soon brought his brother Charles Sumner "Sum" Woolworth into the business. Together they opened a second store in Harrisburg, Pennsylvania, on July 18, 1879.

Before they started their own stores, the Woolworth brothers worked for Augsbury and Moore, a dry goods store in Watertown, New York. It was they who trained the Woolworth brothers and lent Frank $300 in goods. Frank settled his debt by the time he opened the Lancaster store. Frank experimented with a 10¢ table in Lancaster, and similarly to his experiment of a 5¢ table at Augsbury and Moore, it was a success. Sum managed the Harrisburg store, crammed it with goods, hired clerks, and also added a table with a ten-cent line of goods. Once again, the approach was a huge success.

Because of a rent dispute, Sum soon moved the Harrisburg store to York, Pennsylvania and on November 6, 1880, he opened the store in downtown Scranton, Pennsylvania, and formally called it a "5¢ & 10¢ store". There, he developed and fully established the nickel-and-dime concept into American culture. Frank spent time opening more stores, working the back end of the business, buying in bulk for all affiliates and "friendly rivals," and buying from manufacturers to keep prices low. Meanwhile, Sum used his store to train new managers and develop many of the Woolworth concepts which included bright lighting, a polished high-luster floor, glass showcases, mahogany counters, and goods people could touch. Before this, clerks had to work with each customer individually, handing them goods from cases or shelves. This required more clerks, with greater knowledge, and so cost more.

Before Woolworth, the prevailing thought was an entire store could not maintain itself with all low-priced goods. The Woolworth Bros. and their affiliated partner stores originally featured goods priced at only five cents and ten cents. Many other people tried to copy their lead.

Later in the twentieth century the price range expanded; Woolworths did a strictly "five-and-ten cent" business, but in the spring of 1932, a 20-cent line of merchandise was added. On November 13, 1935, the company's directors decided to discontinue selling price limits altogether. Inflation eventually dictated that the stores were no longer able to sell any items for five or ten cents, and were then referred to as "variety stores" or more commonly "dollar stores." Using the Historical Consumer Price Index for January 1913 (9.8) and January 2009 (211.143), the rate of inflation is 2.067%. Therefore, an item costing $0.05 in January 1913 would cost $1.08 in January 2009 dollars, all other things being equal.

Well-known dime store companies included:

Of these, only Ben Franklin continues to exist in this form, while Kresge and Walton's became mega-retailers Kmart and Walmart. The last US Woolworth's-branded variety store closed in 1997; however the Woolworth company had success with its subsidiary sports retailer Foot Locker, and the company's name has been officially changed to Foot Locker to reflect the new focus of the business. Beginning around the 1960s, others tried the larger "discount store" format as well, such as W.T. Grant, Woolworth's Woolco stores, and TG&Y Family Centers.

United Kingdom

Woolworth's opened its first store in the United Kingdom in 1909, when they were also colloquially known as "threepenny and sixpenny" stores, "3d and 6d" being displayed on the shops' frontages.

Asia

In Japan, 100-yen shops (百円ショップ hyaku-en shoppu or 百均 hyakkin) have been proliferating since around 2001. This is considered an after-effect of a decade-long recession of the Japanese economy. Despite the emphasis on value, however, some items, such as chocolate bars, may be priced higher than they are at other stores.

For a few years, 100-yen shops existed not as permanent stores, but as vendors under temporary, foldable tents. They were (and still are) typically found near the entrance areas of supermarkets.

A major player in 100-yen shops is the Daiso chain. The first store opened in 1991, and there are now around 2,400 stores in Japan. This number is increasing by around 40 stores per month. Daiso has also expanded into North America, Australia, Asia, and the Middle East.

In India, a franchisee chain named US Dollar store, charging a flat rate of 49 Rupees and 99 rupees per item was initiated in 2004 by a company called Nanson overseas ltd. promoted by Gaurav Sahni. It was initiated with merchandise imported from the US for its 2 stores in New Delhi. Thereafter, with 300+ stores by 2014, the merchandise is sourced from dozens of countries has been added for variety suitable for the Indian consumer. They were known as 49 & 99 shops. and by 2014, with the Rupee devaluing, the price range of Rs149/- was added. The typical prices in these shops are now 99 and 149 Indian rupees. 99 rupees is approximately equal to 1.5 US dollar. Items are generally cheap gift articles, health and beauty products, food items, toys, watches, office stationery, and crockery.

In China, ¥2 (or ¥3, depending on the area's economic prosperity) shops have become a common sight in most cities. In Hong Kong, major department stores have opened their own $10 shops (US$1.28) to compete in the market, and there are now "$8 shops" (US$1.02) and even "$2 shops" (US$0.26) competing at lower prices, especially in poorer communities. Low prices are helped by Hong Kong's lack of a sales tax and its proximity to China.

In Taiwan, fixed price stores can be found in many locations, including night markets, regular shopping streets, regular market stalls, and department stores. Two typical price points are NT$39 and NT$49. Given that the retail environment in Taiwan is already highly competitive, it is not unusual to see such stores fail. Typically the goods for such stores are manufactured in China to keep costs down.

Stores:

Europe

In Spain there are Todo a 100 shops ("everything for 100 pesetas" (€0.60)), although due to the introduction of the euro and inflation, most products cost a multiple of €0.60 or €1. Most of these shops maintain their name in pesetas, and most of them have been renamed as Casi todo a 100 ("almost everything for 100 [pesetas]"), Todo a 100, 300, 500 y más ("everything for 100, 300, 500 or more") or Todo a un euro. Colloquially, the expression todo a 100 implies that something is either cheap, kitsch or low quality.

In Portugal, there were Trezentos shops (300 escudos, €1.50), but with the introduction of the Euro currency, this designation is not used nowadays and the terms 'bazar' or 'euro store' are preferred.

In Germany, there are ToBi (German: Total Billig, "Totally Inexpensive") stores where most items cost one or two Euro or less.

In Hungary, there are 100 forintos bolt ("100 forints store") stores, but they do not form a single chain, instead of being operated by small, independent companies.

The HEMA chain started in the Netherlands, sell goods using standard prices of 10, 25 or 50 cents, and later also 75 and 100 cents. After World War II, this model could not be sustained and the standard pricing system was abandoned. HEMA is the abbreviation of Hollandish standardized prices company (Dutch: Hollandse Eenheidsprijzen Maatschappij). The HEMA had some 500 Dutch stores in 2011 and also operates in Belgium, Germany, Luxembourg and France.

Stores:

North America

According to IBISWorld, dollar stores have grown 43 percent since 1998 and have become a $56 billion industry. Colliers International claims there are more dollar stores than drug stores. With stores of other types closing in large numbers, dollar stores often replace other types of stores in shopping centers. They succeed partly because of impulse purchases.

Among today's dollar stores are:

Oceania

Stores:

South America

In Argentina, variety stores are called todo por dos pesos (2 pesos).

In Brazil, these stores are called um e noventa e nove (one and ninety-nine, meaning BRL1.99, about US$1.20) usually written as 1,99. They began to appear in the 1990s possibly as a consequence of both the increase in the purchasing power of the low income classes after the curbing of hyperinflation and the decrease in middle-class net income due to a gradual increase in the national average tax load.

Brazilians sometimes use the expression um e noventa e nove to refer to cheap, low quality things or even people.

In Chile, they are called todo a mil (referring to the one thousand Chilean pesos banknote). They are commonly located in middle-class neighbourhoods where big retail stores don't usually venture and in small commercial districts like the ones in Santiago.

Other names

Variety stores are often named for the price of the goods sold in them; the names vary by area and time, as each country has a different currency, and the price of the goods has increased over time due to inflation. Modern names include: