Not one to be undersold, Wal-Mart wants to break into the dollar-store market. The retailer has been testing a $1 merchandise section called “Hey Buck” in some of its stores. After disappointing early results, however, the retailer is rethinking the concept before rolling it out to more locations. The move is an attempt to respond to market share gains made by small-format value retailers, says William Blair retail analyst Mark Miller.
Wal-Mart isn't alone. Miller says regional supermarket operators are featuring more $1 products in an effort to capture incremental sales that are going to competitors such as 99 Cents Only, which is planning to increase its grocery, consumables and pharmacy inventories from 78 percent today to 82 percent by 2011. And Minneapolis-based grocery conglomerate Supervalu is finding success integrating items from its recently acquired chain Deal$-Nothing More Than a Dollar into its existing Sav-A-Lot supermarkets in the Mid-Atlantic and Midwest, with plans to open 15 Sav-A-Lot/Deal$ combo stores this year.