SWEETWATER, Texas -- General merchandise sales have been boosted by 5% to 10% at the 19-unit Lawrence Bros. supermarket chain with new permanent Dollar Day Depot departments.
The everyday Dollar Day Depots, packed with housewares, hardware, plasticware and gadgets, all feature $1 prices and are set up as in-line departments at 10 stores.
"We've seen customers shopping the section regularly, with some spending $20 a week there. Some of our stores are generating on average $400 to $700 in Dollar Day Depot sales," said Walter Smith, supervisor of nonfood.
The retailer is planning to expand the program to nine other smaller stores by June. In smaller store units, the dollar day merchandise will be sold from speed tables. Merchandise will rotate as an in-and-out program every 60 days.
The chain has merchandised a 150-item assortment in 14-inch high cardboard bins placed on gondola shelves in 8- to 24-foot in-line sections since January.
Since then its customers have embraced the product mix enthusiastically, according to Smith. "The new section has been going very good, and [it has] elevated our general merchandise sales. Our retails are as good as or better than some of the dollar day retail stores we've gone to in our areas. Our merchandise is also of a better quality than at those other stores."
Smith has adjusted grosses in the product mix to create a strong value image for the section, and operates on 25% to 40% margins. Although the retailer could make as high as 50% margins on some of the Dollar Day Depot items, Smith said, "we're making 10% on some items to spice up the mix. The lower profit items offer the customer a really good quality item that is a value for the dollar, and it creates a low priced image for that whole department."
The retailer is working with a jobber to order and stock the section. Smith said the key to operating this kind of general merchandise mix is being assured a steady supply of new and different products. Smith said, "the jobber will bring in 48 pieces in an item. We used to order direct in full case packs and pallets from manufacturers, but that was killing us with an inventory overload."
The jobber "supplies the products based on shelf velocity and we no longer have six bins on the shelf all tied up with lighters. Now the other five contain other products."
The jobber, which maintains three satellite warehouses in towns with Lawrence Bros. stores, restocks the depot sections on the weekend.
Best sellers include 3-pack lighters, plastic waste and laundry baskets, 3-pack washcloths, light bulbs, plastic shoe storage boxes, ash trays, cereal bowls, candles and cotton swabs in a 300-count package.
"We're selling kitchen tools in spatulas and spoons for $1, compared to others we've had in the store selling for $2.49, and we're getting more turns out of the lower priced items," said Smith.
The retailer found the space for the dollar day section by cutting back on slower-moving kitchen gadgets and utensils.
