DISCOUNTER INTRODUCES GOURMET SECTION

SARAH MULHOLLAND

CITY OF COMMERCE, Calif. -- 99 Cents Only Stores, the deep-discount retailer based here, has introduced a separate Gourmet Fancy Food section at its new store in Sacramento, Calif.

The 26,000-square-foot unit is the chain's 141st store, according to Eric Schiffer, president of 99 Cents Only Stores. The retailer currently operates in California, Nevada and Arizona, with plans to expand to Texas by January of 2004, he said.

The stores offer a full selection of national-brand grocery products, as well as general merchandise and health and beauty care products. Nothing in the store sells for a penny more or less than 99 cents.

Specialty and gourmet grocery items have always been available, Schiffer said, but they did not have a separate section.

"When we brought these items in, they always did well but they were hard to find," Schiffer said. "They just got lost on the shelves. This really brings them out and makes them much more visible."

The section is marked by a distinctive sign reading "Gourmet Fancy Food," and is roughly 20 feet long and six feet high. The shelving is wood, as opposed to the metal shelving found in the rest of the store.

A product sampling would include artichoke hearts, crabmeat, imported chocolate, olive oil, sesame seed oil and other such delicacies.

Sales have been strong, Schiffer said, and he hopes to roll out the gourmet section chainwide by late 2003. The product mix will continue to grow, he added.

In some locations, stores operate with a beer and wine license, Schiffer told SN, and customers can pick up a 99-cent bottle of Merlot to accompany the shitake mushrooms that are also available.

The stores serve a diverse demographic, Schiffer said, and are renowned in unlikely places. The most profitable store is on Wilshire Boulevard in Beverly Hills, generating almost $10 million in annual sales, Schiffer added.