Sign Of The Times: You Know Things Are Tough When The 99 Cent Stores Have To Raise Prices!
In the less affluent parts of town, “dollar stores” are all over. Providing access to everything from children’s toys, to kitchenware. Most everything is an amazing bargain. You can bring in 10 dollars and be well assured that you’ll be walking out with about 10 items. Very easy for those that suffer from splurging.
However, times are tough, and while stores named “99 Cents Only” are somewhat locked into a fixed price and can’t exactly go around updating billboards, signage, and business materials, they’re left to do the only possible thing they can, raise prices as high as possible.
Fortunately, there’s a ceiling here. Prices still won’t reach the $1.00 mark, but they’ll come close enough. Following the gas station model of pricing, they’ll be raising the price of their items to 99.99 cents.
99 Cents Only Stores will raise its top price for the first time in 26 years to 99.99 cents as rising fuel and commodity prices drive costs higher.
The 0.99 cent increase will take place at its 277 stores later this month, the City of Commerce, California-based retailer said today in a statement distributed by Business Wire.
The boost of less than 1 cent is “in response to dramatically rising costs and inflation,” Chief Executive Officer Eric Schiffer said in the statement. “Just as Motel 6 was eventually forced to raise its price above $6, after 26 years we are forced to raise our price by just about one cent.”
Cash-strapped U.S. consumers, faced with rising unemployment, soaring food and fuel costs and falling home values, are bargain-hunting. The U.S. consumer price index jumped by the most in 17 years in the 12 months ended July.
Sales “have continued strengthening” at 99 Cents Only stores open for at least a year, the company said today, describing itself as “America’s Inflation Fighter!”
99 Cents Only, which sells groceries, electronics and health and beauty products, climbed 45 cents to $9.53 at 4:15 p.m. in New York Stock Exchange trading before the announcement. The shares have gained 20 percent this year.
99 Cents Only, with stores in California, Arizona, Texas and Nevada, reported net income of $2.89 million in the year that ended in March, on sales of $1.2 billion.
Today’s announcement is the first increase since 99 Cents Only was founded in 1982. Spokeswoman Elsy Guardado did not immediately respond to a phone message and e-mail seeking details on how the company would distribute change and whether it planned to change its name.
Motel 6, famous for its slogan “We’ll leave the light on for you,” began in 1962 and originally charged $6 a night, according to its Web site. Motel 6 is now a unit of Accor SA, Europe’s biggest hotel owner.
Picking a name for your business is a serious matter because you have to keep growth in mind. It will be interesting to see what possible options lie ahead for even tougher times.
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