99 Cents Only
In February, we learned that 99 Cents Only was undergoing a Securities and Exchange Commission (SEC) inquiry. Then, in March, the dollar store reported a lackluster quarter, with profits down 24%. Much of the shortfall was attributed to workers' compensation costs in California, as well as weakness in the Houston market.
Today, problems in Houston continue, with lower-than-anticipated sales once more. That's an issue that 99 Cents Only has said it plans to remedy by opening 14 stores in that city this year.
And now that California grocers are past their strike, 99 Cents Only faces the threat of aggressive promoting as stores like Albertson's
Meanwhile, eggs played a part in 99 Cents Only's story, too. These days, eggs fly off the shelves because of low-carb dieters, and 99 Cents Only was not able to procure them at good prices as their newfound popularity hiked their prices. The company said that the lack of eggs cost it $1.5 million in sales in the quarter. It said it has eggs by the dozen now -- a relief, considering when you add into the mix the Easter holiday -- and it is developing a smaller pack to maintain availability. (Though that leads one to wonder if the company is going to attempt to peddle an egg six pack for a buck, and how that will go over with shoppers.)
However, the biggest question may be how an economic recovery will impact the dollar retailers. While 99 Cents Only may have some elements that are independent of its rivals, Family Dollar
In a big-picture sense, there may be no reason to cry over the spilt milk (or the missing eggs). More dollars in the wallet could likely add up to consumers upgrading their shopping budgets to Wal-Mart
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Alyce Lomax does not own shares of any of the companies mentioned.
