'99 Cents Only' Store Chain Considers Raising Prices, Changing Sign To '99 Cents, Orly?'
In a conference call with analysts this week, the CEO of the California-based "99 Cents Only" store chain was asked whether they'd consider breaking their 99-cent barrier to improve their dismal numbers. He responded:
[It is] definitely on the table. That is something we’re looking at . . . in the future for us. We’re looking at doing some experiments. Obviously one way [is that] you can start selling things for $1.05, $1.09, $1.15 and other ways. You could have more of a break between your 99 cents price point and the next price point."
Of course, breaking their 99-cent promise—the core of their branding—would be risky, not to mention expensive (think of all the signage they'd have to change). But the economy still sucks, the company has been in the red for two quarters, and shareholders are getting restless. You'd better buy all of your off-brand toothpaste now while it's still cheap(er).
"'Mostly 99 Cents Only'? Chain rethinks its pricing scheme" [LA Times] (Thanks to Anthony)
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But stay away from that Chinese toothpaste...
Not surprising that this is happening. The gravitational pull of higher prices for fuel,electricity and especially petroleum based packaging are all taking their toll on every store's margins. But,when you can't raise your prices because you picked a crummy name,something has to give. I don't have any 99 cents only stores in my neck of the woods,but always stop there when I am in Arizona.I just hpe that they don't take the extra proton pwered shrink ray to their products to keep the name intact...
Why even change the name? After all 7-11 did not change their name after they changed to a 24 hour operation.
Why not shrink ray all the products? Would solve the problem.
so have they actually raised the prices or is this just speculation?
I'm actually surprised they aren't doing better. Look at place like Grocery Outlet, they have been doing great since the economy took it's "downturn".
Maybe they could lobby for the U.S. government to do what the Zimbabwe government did, and just arbitrarily lop a few zeros off the currency. ;)
I don't get it...Dollar Tree seems to be doing just fine...is the one penny less per item hurting them that much?
Interesting. I blogged about the dollar stores a few weeks ago. I read they were actually making money. Apparently, 99 Cent Only Stores reported $304.9 million for the first quarter. It's an increase of 4.1% over the same period last year. They have a total of 273 stores. Eight new stores have opened during the first quarter, and they are planning on opening twelve more before the end of the year. Hmm, it's interesting how much things can change within a few weeks.
There's a franchise in Utah called Five Buck Pizza. When they opened, they offered a medium pizza with unlimited toppings for five bucks. Due to higher food prices, they later raised the price to six, but kept the five buck price for a one topping medium. Currently, the only pizza that is now five bucks is a small. If they have to raise their prices again, they may have to change their name.
is this really news? All that happened was they had a meeting and said that a price change is on the table. What's such a big deal about that. Consumerist used to have useful and practical information, now its just all about blogging bleak news. Enjoy your vacation Ben!
McDonalds has yes to raise their price on a double-cheeseburger. Still .99
Maybe they should start selling 'cutter' grade hamburgers instead of toxic chinese made toys.
Weird. Little Ceaser's here in Michigan has had a LARGE pepperoni pizza going for $5 for several years now.
My girlfriend and I have this sort of "back of napkin" (i.e. bullshit) metric we use to judge neighborhoods, based on the number of "Check Cash", Liquor stores, and Dollar stores we spot. If we see too many of any of these in one area, or even worse - all three, then we designate the neighborhood "economically depressed" and won't live there.
Clearly, in today's economy, "Dollar store" type places are going to have to decide whether they will start selling things for more than $1, or somehow find a cheaper stuff to sell than the toxic crap from china that they currently carry. If possible, they need to find what developing nation China buys their crappy stuff from, and start getting product directly from that crappy^2 country.
The Dollar Tree in my neighborhood is being remodeled. I'm waiting to see if they change the name to Euro Tree, since the dollar isn't worth much anymore.
@brainswarm: "Weird. Little Ceaser's here in Michigan has had a LARGE pepperoni pizza going for $5 for several years now."
You are over paying.
Well, damn, there goes one of my favorite "yo mama" jokes, to wit:
"Yo mama's so stupid she asks for a price check at the dollar store".
Sad times indeed.
Our Little Caesar's just went to 6 bucks for the pep pizza...
We could follow Zimbabwe's lead and just knock a few zeros off of our currency. $100 now = $1! Problem solved!
The only thing I seen around is "Dollar Tree". At least they tend to hold true to their name. There is also Dollar General Store, but they don't even have half their items rounded to a dollar amount anymore.
Motel 8 is way more than $8 now.
How about "*.99 Store"
Remember hearing about the gas stations with mechanical dials that couldn't go past $3.99 ? The state government in those places allowed them to do half-gallon pricing...
So maybe they could sell 1/2 a tube of toothpaste for 99 cents. :)
Our local "A Dollar" sells items that are more than a buck. I bought some duct tape for a buck a roll but also got 300 index cards for $1.29.
Dollar Tree is still a dollar though. They also have some decent stuff there. :)
Some of the dollar stores in houston have changed to dollar and nine cents stores lol
Can they just apply the dreaded grocery shrink ray? Anything that you can package in smaller amounts, do it. $1.00 for a single #10 pencil instead of 8, etc...
No one goes for the $5 pizza at Little Caesar's. Only the $7 pizza is worth anything. It's close to being (but not quite) a true, Detroit style pizza (look it up). Clearly even at $7 you're not getting the best pizza; what you're getting is the convenience of fast food: drop in, pick it up, and eat something mediocre but pleasing. For *good* Detroit style, you've gotta go to Buddy's, the Cloverleaf, or Carlo's.
Oh, yeah, 99¢ store. Like, you'd think they'd've had something in their business plan to deal with such mundane things as inflation. Hell, even back in the late 90's, Jenny Craig was smart and reserved all the toll-free numbers -- 1-800-96-JENNY, 1-800-97-JENNY. Admittedly, I don't know what they do today.
What about renaming it 99 cents +, as in, "plus going up". I know the Dollarama has items up to $15 here.
With all due respect, these price increases are inevitable. You guys make a stink whether or not a store either decreases the size of a product or it raises the price. The truth is inflation is real and in the past year prices across the board have gone up. Each store is just trying to get by and make what little profit they can -- and this is not new phenomenon. Take the well known names of Motel 6 or Super 8, two of the original American roadside motel chains. Where to the 6 and 8 come from? The price it original cost to rent a room for a night. I don't think you see those prices any more.
@balthisar:
"Detroit" style? lol. There are only 2 styles: Chicago and New York...and Chicago is THE WINNER. Lou Malnati's ftw.
Dollar stores around here seem to be doing OK, both the Dollar Store and the Dollar Tree chains. Both still have good buys if you pay attention to package sizes.
There will always be closeouts and near-pull-date items to sell for cheap.
I blame management.
Dang, man.
Anybody remember the "Dime Store"???
Even as an expression, not necessarily a company's name??
@ludwigk: How elitist and snobbish of you and your girlfriend. Yeah, these aren't usually found in the nicer neighborhoods so people in those neighborhoods have to drive farther to get to these establishments.
Everyone I know shops at the Dollar Store, well, except for new money (ie. rich white trash). Even if they raise their prices, it will still be the least expensive place to get somethings.
Honks $1.00 store here in Provo Utah raised their prices to $1.05 recently. Then I think they even went to $1.09.
Last time I drove by, they were back to $1.00, though.
The 99 cent chain is something that is hard to get if you haven't been to one. I know living on the east coast and seeing dollar stores I would usually just snicker.
But now living in CA the 99cent store is like the Target of the dollar store world. Everyone I've been to is nearly spotless and you can find some great deals. The best is finding the failed products, I was getting two, two liter bottles of Coke's C2 product for a buck last year. It's kind of like a game, but I always wind up spending at least ten bucks every visit on various things from cleaning products to candy.
And these stores aren't just in poor neighborhoods, the one I usually visit is in Burbank, where you're lucky to find a house for under 600k.
Will it become ORry in Asia?
@badhatharry: Or how about the "0.99 SDR Only" store? Every purchase could come with a free lesson in the world economy.
@ludwigk: You're setting the bar too high. We have all three of those within a mile radius--at least four check cashing places, three liquor stores, and two dollar stores (one is a 99 Cents Only). In addition, we have three pawn shops, two psychics, and several immigration lawyers.
In the same five-block radius, we have two or three brand new high-rise condo complexes, an old-money neighborhood of beautiful homes, a mall that is a tourist destination, the single most highly traveled stretch of road in the USA, and several Class A office buildings. It's not depressed, it's just urban Houston, where there is no meaningful zoning. Where we live is one of the most central locations in the city, and we love it.
"five-block" should read "mile" in the second paragraph above, though it depends how you count your blocks.
Here's an idea, re-open as a 5 and 10. All items either 5 bucks or 10 bucks.
For some reason in my area it has been nearly impossible to find a "true" dollar store for a while.
Perhaps it is too many independent owners trying to catch the trend. But most of the "Everything a Dollar" or "Dollar Emporium" stores in my area have LOTS of stuff that aren't even close to a dollar. In fact, I've had to search for items that were a dollar, just for my own amusement. Items seem to go from a buck to as high as $20 in these stores.
Also, a nice mall nearby has a "5 and under" store which seems to do pretty darned well.
@OP: "But the economy still sucks"
Actually, Chris, prices tend to stay relatively still during a recession because recessions usually don't have that much inflation. Haven't you heard of "stagflation?" Yeah, well that's a completely different story.
A local dollar store called "Wow, only a dollar!" put red electrical tape next to their sign to form a plus sign. Because everything there is $5+ now. Dollar stores don't have anything good anyway though, so who cares?
They should look to the airlines for this one. You know, keep the 99 cent price tag to keep people coming in, and then charge everything else in fees.
"Let's see, ma'am...you have a 99 cent pair of socks there... that'll be 99 cents, plus $1.30 "Customer Convenience Fee" for running the transaction through the register...$1.27 "packaging surcharge" to cover the cost of cellophane, another $2.25 in "shipping fees" to cover the cost of shipping the crap from China, 75 cents for import duties, 77 cents for building maintenance, 57 cents for using our parking lot...that'll be $7.90 please...."
Why dont they just keep the same price but source cheaper items? Instead of getting a two-pack of coke for 99c make it a one pack, instead of 10oz toothpaste sell 5oz etc...
@Dabigkid: Curious, I did some looking into the statistics, and my oh my, inflation isn't as low as I would have expected. The CPI last year rose 4.3%. Still, it's no late '70s. Perhaps the only reason they're finally changing prices is because they now realize will full certainty that their current business model is unsustainable, but that's not real news. Dollar stores have been jaded for a long time.
@dakotad555: Maybe not where you live, its been 1.50 here for 3-4 months.@JN33: I have worked for them and don't eat that crap for a reason - low quality ingredients! As the expression goes - you get what you pay for.
See your niche going bye-bye? Bye-bye niche!