All for a dollar

From 9 am to 9 pm, the cash register rings at Florida, a store in the northern suburb of Borivali in Mumbai.

Sajeel Sheikh, the owner, set up the shop seven months ago. Earlier, a video games parlour (which had a snooker table) occupied this 500-plus square feet of commercial space. But it went bust, thanks to fierce competition from similar parlours.

Florida has one unique selling proposition. A customer pays just Rs 49 to Rs 99 and chooses from 2,000 to 3,000 gift and utility items, many of them Chinese products.

It's but one of a host of so-called dollar shops (the name is derived from the fact that a dollar's exchange rate in rupees hovers in the Rs 47-49 vicinity) that have taken Mumbai by storm.

They're to be seen in Mumbai suburbs like Andheri (Just 9 to 9 Dollar shop at the Lokhandwala complex), Hill Road in Bandra (Fifty -Fifty), Linking road in Khar (9 to 9 Dollar Shop), at Santa Cruz (Just Dollar Shop), at Dadar (A to Z Dollar Shop House of Gifts) and even in Chembur in the east of Mumbai.

A franchised operation, dollar stores have their roots in the US.

Set up first by Allied Systems to cater to consumers who wanted value for money, the first outlet was opened in 1992.

Eleven years later the store still operates in Las Vegas and the company has more than 300 such outlets.

Dollar stores stock over 50 high selling category products, with each store displaying 2,000-3,000 items at any time. These include hair, nail and fashion accessories, candles, houseware, kitchen goods and cleaning supplies.

The typical dollar store customer is someone "looking for real attractive value on basic necessities, all priced at one dollar". The majority of shoppers at dollar stores are women. Many pop in on impulse to buy one or two items but come out with six or seven.

Confesses K Devi, a middle class housewife who recently stepped into a dollar store for the first time: "I wanted to buy a gift but emerged with nearly a dozen items," she says.

The gambit of offering low prices and a wide selection of basic staple items is clearly proving to be successful.

The dollar stores can be put up in just about any city with a population of 5,000 or more.

The investment in them is minimal -- a fee -- and because the operation of the business is simple, no previous retail experience is necessary.

The store owner gets products cheap from a national buying group.

So successful has the concept been in Mumbai that national branded good producers seek to stock their wares in the stores.

Says Maganbhai, who runs 'Gifts for a dollar' at Borivali: "We are now catching the interest of branded goods manufacturers who have been approaching us to keep their products.

"We are fine with this arrangement as it will give us a qualitative edge, with known names in the fast moving consumer goods segment associating with us."

So dollar stores that were regarded as shops that stocked cheap merchandise are slowly being looked upon as outlets that keep inexpensive but quality merchandise.

So are they a threat to the bigger retail chains? Not for the next 10 years at least, replies BS Nagesh, CEO of Shoppers Stop.

"They constitute two per cent of the market today," he adds.

Nagesh, in fact, says that dollar shops are good for big department stores.

"Shoppers who were so far used to purchasing articles worth Rs 100 from street level outlets will now become used to getting value for money from air-conditioned stores," he says.