Toy competition intensifies with another new initiative

One thing retailers learn, some of them the hard way, is to take no competitor lightly. Consider the case of Dollar General and a toy promotion it is running for the holidays.

Conventional wisdom holds that the greatest impact the growth of Dollar General and others of its ilk have had is on Walmart due to their appeal to opening price point shoppers. There is seldom any mention of Target the discount store in these discussions as it is somehow thought to be above it all, appealing to shoppers for whom such names as Missoni, Giada and Archer Farms have meaning. While Target surely appeals to a more affluent shopper, Dollar General is looking to siphon off some toy sales this holiday season from Target, Walmart and Toys “R” Us by offering a 10 percent discount on toy purchases of $100 or more. The discount is available through Christmas Eve.

Since Dollar General offers more than 300 toys at less than $5 shoppers shoppers’ are incented to purchase enough items to reach the discount threshold, which ensures kids will have plenty of presents to open, because at a certain age the quantity of presents to open matters more than the quality.

Dollar General doesn’t offer all of the season’s hottest items, but its promotional efforts in the toy category (it recently published a 24-page toy book and began online sales too) have the potential to impact competitors in the category, assuming one takes the broader view of competition. And if that weren’t enough, consider the fact that the company now operates 9,641 stores, which means cost conscious toy shoppers are likely to drive by a Dollar General or two on their way to Target.