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Dollar General grocery poised to challenge Wal-Mart

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Published:   |   Updated: December 9, 2013 at 12:32 PM

The prices on strawberries are great, same with milk. And though the bananas may be on the ripe side for some people’s taste, they’re cheaper than Publix by a significant margin. Is this a new Walmart store? Nope. A new Dollar General “Market” grocery store.

The dollar store brand that helped start the market sector of dollar stores in the first place has recently built a new prototype, full-sized grocery store in Thonotosassa, and the company is replacing other older, basic dollar stores around the Tampa region with a new prototype design, including one at 8212 N. Armenia Ave., complete with lush landscaping, bright colors, polished concrete floors and neatly organized inventory.

And if recent market studies hold, Dollar General is going to give Walmart a run for its money with shoppers who simply want the lowest prices.

“The reputation of a dollar store comes with the territory, but we are actually not really a dollar store,” said company Spokeswoman Crystal Ghassemi. In fact, only about 25 percent of items at Dollar General are a dollar or less. “A lot of people are starting to realize that we carry a lot of the most-popular brands on the shelf.” Jif peanut butter, Gatorade drinks, Dasani water and so on, often (but not always) at matching or lower prices than rival budget stores.

So far, Dollar General has only built about 100 of these grocery stores nationwide, and 14 are in this state -- jumping right into one of the most competitive grocery markets nationwide, with Publix dominating, followed by Walmart, Target, and then Winn-Dixie and Sweetbay, which are merging operations. But the Thonotosassa location is fortunate in one regard. There’s not a lot of that competition nearby. Though there’s a Winn-Dixie just down the street, there’s no Publix or Walmart for at least five miles. Family Dollar did recently build a new location about a mile away, but the area is generally speckled with low-slung single-family homes, RV storage yards, and the nearby Big Top Flea Market.

As for prices overall, the market research firm Kantar Retail found Dollar General just barely beat out Walmart on pure price for the second year in a row, and beat Family Dollar by 7 percent, Stop & Shop by 19 percent, Aldi by 32 percent and Target by 48 percent. The survey did not include Publix.

In Thonotosassa specifically, Dollar General Market bananas were priced lower than Publix, at 59 cents a pound versus 69 cents. Eggs were lower, at $1.65 per dozen versus $1.98 at Walmart. And milk was priced at a remarkably low price of $3 per gallon, versus $3.69 at Walmart.

The Dollar General Market almost matched Walmart exactly on cans of tuna, bags of sugar and store-brand bread. But the Dollar General was higher on Oreos than Walmart, at $3.25 per bag, versus $2.98, higher on Bertoli pasta jars, at $2.50 versus $2.18 and much higher on peanut butter, with a 16-ounce jar of Jif at $3 versus $1.98 at Walmart.

In central Tampa, the new, mainly retail prototype store on Armenia Avenue shares some design elements with the Market grocery store. The aisles are a bit wider than usual, the overall building is a bit bigger, and the inventory is better organized. There are still the occasional oddity items, such as overstocks that may not have sold out elsewhere. For instance, the Lays “Limon” potato chips with lime flavor for $3.50 per bag, and “Alligator Gumbo”-brand gator jerky for $3 per bag.

Much of the nation is built-out as far as some kind of Dollar General store, as there are 11,000 in the nation, with 650 in Florida, including 28 in Hillsborough County, 21 in Pinellas and 26 in Pasco.

Financially, the company has been stable, though it’s perception on Wall Street is mixed. The stock rose six percent Friday after the company posted better-than-expected profits. Sales at stores open more than a year increased more than four percent, and total sales grew 10.5 percent. Still, some analysts are also asking when shoppers who downshifted from places like Target to dollar stores may reverse course and go back to their favored stores.

Meanwhile, shoppers should expect more of the fresher-designed stores to pop up. Over time, Dollar General plans to use the new prototypes for any new store, any renovated or relocated store.

rmullins@tampatrib.com

(813) 259-7919

Twitter: @DailyDeadline

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