Case Study #1: Family Dollar: Reinventing the Discount Store

1. Evaluate Family Dollar’s retail strategy. Will it work in both good and bad economic times?

Family Dollar’s retail strategy will work in both good and bad economic times. The company’s mission: is to provide our customers with a compelling place to shop, our team members with a compelling place to work, and our investors with a compelling place to invest. Our vision is to be the best, small format convenience and value retailer serving the needs of families in our neighborhoods. (Family Dollar 2012 Annual Report) During the economic downturn, Family Dollar reevaluated the company’s goals. One of the goals the company will be refocusing on will be to build customer
They often compete for customers, merchandise, real estate locations, and employees. This competitive environment subjects Family Dollar to various risks, including the ability to continue sales growth and to provide attractive merchandise to our customers at competitive prices. Price reductions by competitors may result in the reduction of Family Dollar’s prices. Retail sector consolidation, changes in pricing of merchandise, or offerings of other services by competitors could have a negative impact on Family Dollar stores. Many large box competitors are or may be developing small box formats. A number of these smaller stores have opened and may produce even more competition, particularly in urban markets. Our ability to provide convenience in a small box retail format while offering attractive, competitively priced products could be impacted by various actions of our competitors that are beyond our control. (FD 2012AR)

4. How can a full line discount store do better in competing against a variety store like Family Dollar?

In order for full line discount stores to compete with Family Dollar, they would have to down size and open a neighborhood store. They would also need to significantly reduce the price of their products and also package them in smaller sizes. Full line discount stores would have to draw in consumers possibly by carrying a larger variety of brand name products. The layout of the store