Originally created 05/17/02

The discount trend

The off-brand and private-label products that line the shelves at the new Fred's discount store in Augusta represent more than just savings for bargain hunters.

The discount retailer's presence points to a continuation of a larger trend toward stores with lower prices andstripped-down services.

Last year, 85 percent of Americans shopped at discount stores, according to America's Research Group, a Tennessee-based strategic marketing firm and industry tracker. The retail landscape in Augusta confirms it: Dollar General, Bill's Dollar Stores and Family Dollar are among the area's dollar-themed retailers; Save-a-Lot specializes in discounted off-brand, private-label groceries; and T.J. Maxx, Rose's and the new Ross Dress for Less apparel stores offer inexpensive, off-the-rack clothing.

These, coupled with general merchandise giants such as Wal-Mart, Target and Kmart, have put tremendous pressure on department stores and other retailers - particularly during tight economic times.

It's no coincidence that troubled retail giant Macy's left town earlier this year, said Britt Beemer, the chairman and founder of America's Research Group

"The day and age of Americans being reluctant to shop at discount stores is over," Mr. Beemer said. "Major department stores have lost on average between 25 to 33 percent of their shoppers in last five to seven years."

Department store shoppers expecting high levels of service were disappointed too often, Mr. Beemer said, adding that discounters have captured a growing number of brand names.

"At this point, if you're a manufacturer, how can you afford not to sell to discounters?" Mr. Beemer said.

The economic downturn of the past 18 months might have pushed more people to try a discounter, Mr. Beemer said. The presence of so many brand names changed their perceptions about discount stores.

"Why buy at a department store what you can buy at a discount store for 40 percent less," he said.

As the traditional retailers contract, discounters expand. Fred's has more than 400 stores in 14 states. A new distribution center in Dublin, Ga., means the company plans a full-scale expansion in Georgia, spokeswoman Dudley Kizer said.

"The concept has been very successful for us in the Southeast," she said. "Now people know us and know the products we carry. Growth has been good enough to merit this expansion."

Reach John Bankston at (706) 823-3352 or john.banks@augustachronicle.com.


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