If you are living in America and want to buy cheap products then this article is for you. Today we will discuss the American chain of 99 cents stores and all there is to it. So let’s begin.
History
The first 99 cents store was founded back in the 1960s when its founder, David Gold, inherited a small liquor store in Los Angeles and took the decision of testing to sell the wine bottles for only 99 cents. The test was a successful hit and he decided to sell everything for 99 cents only.
In 2010, the store increased the prices of their products by 1% and started selling them at 99.99 cents to overcome the rising costs of products. In 2013, the gold family sold the 99 cents store franchise to Ares Manwagement and the CPP Investment Board for 1.6 billion dollars.
99 Cents Stores
The 99 Cents Stores, also known as 99 stores, is an American Fixed-priced retailer chain that is based in California. Most of the products are still sold for 99 cents or less in these stores, but only a few products are sold for more than 99 cents.
The 99 cents store chain produces a total of $2.7 billion of sales per year and each store produces $4.7 million sales each year. They usually deal in popular consumable and general merchandise. They say on their Website that:
“We are an exciting shopping destination—often the first stop—for price-sensitive consumers, and a fun treasure-hunt shopping experience for other value-conscious consumers.”
Why They Are Very famous
The reason why the 99 cents store is very famous not even in America but also famous business worldwide is because of its cheap rate and its popular products and merchandise. The 99 cents store secured its place as a famous store after a German photographer Andreas Gursky captured an image of a 99 cents store in Hollywood in 1999. That picture was featured in the museum of Modern Art in New York City. And was later sold to by Sotheby for $3Miilion and settings a world record.
Leading Retail chain
With over 350 total stores in 4 states and 2 distribution centers in California and taxes, the 99 cents stores are the leading extreme value retail chain in the western united states.
In 2012, the chain of stores marked a point in history by celebrating its 30th anniversary and selling the company to Ares management and the Canadian pension plan investment board. This result in the company’s further expansion, like new stores and new markets.
The Reason Behind Their Success
I think the main reason behind their success is the use of the letter 9. All of their prices end with word 9; Like most of their products are for .99, .89, and the customers think that they are saving some money after buying their products. Their lucky number is 9, and they also use the word 9 a lot in their advertisements and promotions.
How they can sell for 99 cents only
The secret behind their 99 cents-only prices is that they buy their products very strategically, They usually buy their products when the prices of products are very low when the season is about to end. Store them for the product prices to rise again and then sell them for less prices.
They make purchases from many suppliers, including General Electric, Colgate-Palmolive, Johnson & Johnson, Unilever, etc.
Store Philosophy
The philosophy behind the success of the 99 cents store is
“We don’t buy something just because it’s cheap,” says Vice President Thomas Hale. “We try to buy things that customers recognize and would use. The customer has to walk in and immediately identify a product and say, ‘Wow.’ If we don’t get that reaction, then we don’t get the repeat on the customer.”
Business Strategy of 99 Cents Stores
The Business Strategy of the 99 Cents Stores chain is to extend their chain as much as possible. Their main target customers are high-income groups who earn more money and it’s common human nature that they want to save as much money as possible. To save more money, the high-income groups buy products in bulk so the profit margin will be much better in that case.
Conclusion
After reading this article, you can know all about America’s most affordable chain of retailer stores, 99 cents stores. There is much more to find than this. The 99 cents store was founded in the 1960s and remains true to its roots and sells products for 99 cents or less, only some products are over $1 but still very much affordable. the current business strategy of 99 cents store is to expand its network of stores as much as possible.