Walk into a Target store anywhere in the U.S. and it’s a safe bet there will be at least a few customer rummaging through the bins of single price point merchandise in the Dollar Spot located just inside store entrances. The ever changing assortment’s treasure hunt appeal and single price point value proposition are simply too much for many customers to bypass. It is enough to make wanna-be merchants wonder if further expansion of the concept makes sense for Target, especially considering the raging success companies such as Dollar General and Family Dollar are having.
On Wednesday, Familiy Dollar reported a second quarter profit that increased 10.7% to $136.4 million compared with $123.2 million for the second quarter of fiscal 2011. Comparable-store sales increased 4.5%, thanks to increased customer traffic and increased average ticket. Sales were strongest in the consumables and seasonal and electronics categories.