Family Dollar is among several chains who have attempted to combat the economic recession in recent years by carrying new and different product categories in their stores. Among them are so-called “sin” items such as cigarettes, wine and beer. Many of the dollar stores point to the fact that they are facing increased competition from new retail formats like Walmart’s Neighborhood Market Stores. However, if truth be told, these “sin” items generate higher profit margins and tend to drive increased traffic.
What if Walgreens and CVS were more “health minded” in the products they sold?
In fact, Family Dollar has reported that by adding cigarettes to 6,000 stores over the summer they were able to generate frequent purchases among is customer base that over indexes in tobacco use. According Bryn Winburn, public relations manager for Family Dollar,”our goal is to be relevant to our customer and meet her needs every day… our target customer is the one that previously had to purchase those products elsewhere.”
Dollar General, on the other hand, does not offer cigarettes in their stores, however, they have successfully tested liquor and wine sales in a limited number of stores and expect to expand this “sin” category to almost half of their stores.
Which begs the question. What if stores like Walgreens and CVS were to be more “health minded” and eliminated the sale of cigarettes in their stores?