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Dollar Store News article #5
Dollar stores attract upscale customers
Mix of products, plus uncertain economy, draws new clientele looking for
bargains.
Maureen McDonald / Special to The Detroit News. Tuesday,
March 25, 2008
SOUTHFIELD -- An upswing in upscale customers helps Southfield-based Dollar
Castle increase its revenue while other businesses are trembling in the economic
turbulence, according to Eddie Denha, CEO of the 24-store chain.
"People used to come to our stores as an amusement. Today they come to save
money on every day items, cleaning supplies, potting soil and beauty products,"
said Denha, who started his Michigan empire in 1992.
His franchise owners and store managers report people in mink coats and Ralph
Lauren wind breakers rolling carts through stores chock full of its top 10
purchased items, including paper towels, batteries, cleaning supplies and
candles.
I'm happy, thank God. Whatever comes is a blessing. We do believe in doing right
by the people in our system," he adds.
In addition to a wide variety of dollar items, Dollar Castle sells plastic
dinosaurs and mini-blind kits for $6, laundry detergent for $3.50 and a variety
of items, four for $5. Bargain hunters find tidy shelves, ample stock.
Peter Mona, owner of Dollar Castle Store #23 in Garden City bought a franchise
in 2005, noting the business is easier to run than an auto parts store, his
previous endeavor.
"Dollar Castle can buy smart because of the volume of stores. They bring us a
steady flow of merchandise," he said.
Denha visited a concept store called Dollar Bills in 1992 while shopping for a
new business plan. With one year of business classes from a community college
and experience as a wine buyer, he was ripe for something new. He could barely
wedge his way in the door with the throngs of shoppers loading baskets full of
bargain goods for the Christmas holiday. Surely growth would follow.
Still, the notion of the post-inflationary Five and Dime store wasn't as simple
as shooting fish in a barrel. Denha researched the concept. He found traffic
congealed around towns where the majority of the population was in lower to
middle class. His first location was a former Woolworth in downtown Ferndale,
still a flagship operation.
"Basically it is convenient and everything costs less. Even the vitamins are
cheaper than the health care store across the street," said David Orlowski, a
Ferndale private detective who put a pair of reading glasses and laundry
detergent into a shopping basket. "Everything I need for my kitchen and bathroom
I can find here. I also buy my greeting cards for a buck."
Denha seeks people like Orlowski, frequent shoppers who would sooner buy in
smaller quantities than buy products in bulk at the warehouse stores. Over the
years he has added a 100,000 square foot warehouse in the former Holden Red
Stamp building in Southfield. The combined purchasing leverage helps land name
brands at low prices.
"Dollar Castle is very good at buying inventory. They have built the right size
stores, created a polished look and a solid brand," said Paul Bensman, retail
consultant and owner of Details in Retail in Southfield. "Poor people can't
afford to shop anywhere else and upscale consumers can't pass up a bargain."
Maureen McDonald is a Metro Detroit freelance writer.
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