Discounters charge led by trailblazers in home goods categories - Annual Productivity Report on Full-Line Discount Stores

Discount Store News, August 7, 1995

Other discounters, notably Clover, Venture and Bradlees, entered the computer products market for the first time in 1994 and early 1995, and they will increase their presence this year and next. With households now accounting for virtually all the growth in the computer industry, mass merchants like Target, which has vowed to take 7% of the software market over the next two years, are primed to become the dominant channel for consumer software titles.

Wal-Mart's aggressive growth in pharmacy accounts for most of that category's growth, with Kmart running second. ShopKo and Caldor grew their businesses, but not dramatically. The failure of some regional drug chains, as well at the closing of many Phar-Mor stores, gave discounters a chance to snare customer lists, and discounters have also been able to price aggressively against traditional pharmacists and leverage their greater buying power.

Hardware, after years of decline as a percentage of sales, rallied somewhat, growing at about the same rate as the industry as a whole. Many discounters strengthened their departments in response to customer requests, and Wal-Mart has begun expanding into "C" skus, which turn slowly but build customer loyalty.

Stationery, led by greeting cards, continued its strong growth, although not at the rate of previous years. Over the past five years, discounters have repositioned stationery in prime real estate at the front of the store (Target and Venture offer dramatic examples) and have moved into higher-end goods. Hot licenses, such as Power Rangers and The Lion King, have also stimulated sales, and new products, like recordable greeting cards, have built average tickets.