Regional survivors stress soft goods to weather the Big Three storm - regional discount chains compete against national chains - Regionals - Industry Overview

Discount Store News, August 15, 1994 by Pete Hisey

As Strachen notes, the market share of combined regional operations has slipped consistently over the past few years, from 85% in 1980 to 33% in 1991 to 24% in 1993. This is attributable to downsizing at chains like Ames and Rose's and the total evaporation of other chains, like Zayre and Hecks.

The survivors, after staggering in the early '90s, appear to be coming back: Ames turned its first profit in five years in 1993; Hills emerged from bankruptcy stronger than ever; and even bankruptcies like Jamesway and Rose's appear headed for successful, if significantly downsized, operations in the near future.

As the major chains shift their operating emphasis to sprawling supercenters (as many as a third of their stores will adopt that format in the next few years), regional discounters have a distinct opportunity to maintain the traditional discount model: brand names of most-wanted merchandise at an everyday discount in a relatively convenient self-service atmosphere.

Those that execute their strategies effectively will not only survive, but prosper, in a fragmented marketplace.