Mervyn’s Tries Dollar Store-Within-The-Store

Mar 19, 2004

By George Anderson

The department store chain, Mervyn’s, announced yesterday it would add a store-within-a-store concept called the “$1 to $5 Shop” to each of its retail locations.

The new section is intended to replicate the dollar store shopping experience.

Greg Terk, a Mervyn’s spokesperson told the Los Angeles Daily News, “It becomes a destination and it brings life to the store. You can be there buying T-shirts and your
next spring outfit, then find something fun and different in the dollar shop. It augments everything else in the store.”

Others were less positive about the concept.

“This seems like desperation, frankly,” said Eric Beder, senior vice president, Northeast Securities Inc. “This doesn’t seem like a long-term solution, but honestly, I don’t
know what the solution is. With Target trying to sell them, I don’t think they do, either.”

A customer, Roslyn Jew, said she sees the method behind Mervyn’s madness.

“It attracts young people,” she said. “They find the doodads, then they coerce you into buying them.”

Moderator’s Comment: What are your thoughts on Mervyn’s dollar store-within-a-store?

Kurt Barnard, president of Barnard’s Retail Forecasting, said Mervyn’s “$1 to $5 Shop” has merit. “They realize that the dollar stores are taking market
share away from them, so the best defense is an offense. You protect yourself by including what’s drawing customers away from you.”
Anderson – Moderator

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