Mom-and-Pop Dollar Stores Fight to Survive as Chains Move In

The 99-cent store with the bright red awning cannot compete with the cutthroat pricing or huge selection at the two Dollar Tree outposts in its poor Brooklyn neighborhood.

So it has found another way to lure customers: with the personalized service usually associated with luxury stores.

After one woman requested a reusable lint brush, it began stocking them for 99 cents. It saves items for customers until they can pay for them. It anticipates their needs with air-conditioners in summer, heaters in winter and roses on Valentine’s Day. And it even offers a self-serve coffee stand where they can linger.

“It’s evolved beyond just being a 99-cent store,” said Habib Abdul Musiwir, the manager of 99¢ & Up Millenium Discount & Party Supply in East New York, whose customers have gone to check out the Dollar Tree stores only to return. “We’re meeting the needs of the community.”

Small family-owned dollar stores are under enormous pressure to hold onto customers and remain solvent as national chains like Dollar Tree expand their footprint in New York City and elsewhere, a trend underscored by Dollar General’s recent move to open stores in the city for the first time. Some independent stores have emphasized their neighborhood roots, while others have raised prices or tweaked their inventories beyond party supplies and off-brand shampoos to include household staples like bread and milk and even organic foods.

But just as supermarket and drugstore chains have reshaped local economies and wiped out many small businesses, dollar store chains are beginning to take over neighborhoods where mom-and-pop dollar stores have traditionally dominated. Many independent store owners and workers say they are facing a bleak future as their customers have more choices, and rising rents and operating costs further cut into their dwindling profits.

“The chains are growing rapidly at the expense of the independents — when they open up one chain store, they destroy five or 10 independent stores,” said David Emrani, the owner of Pride Products Corporation, which imports general merchandise and distributes it to about 3,000 independent dollar and discount stores nationally, about half the number from a decade ago.

Mr. Emrani himself owned six dollar stores on Long Island in 2008, but closed all but one of them after Dollar Tree chain stores opened nearby and not only poached some of his workers but also took away his customers. “You constantly have to ring up — if you don’t, you die,” he said. “You have to have more and more customers every day to survive.”

Read more at The New York Times.