TOKYO: For years, dollar stores have been nibbling away at everyone from Wal-Mart to Walgreens. Now, a new competitor is expanding in the U.S. with some big plans.
The first of about 10 Daiso Japan stores in Dallas and 10 more in Houston opens Saturday in Carrollton Town Center at 2540 Old Denton Road.
The neighborhood shopping center is getting a redo, with anchor Asian grocer 99 Ranch Market opening in mid-October. The center is on the southeast corner of Bush Turnpike and Old Denton Road in Carrollton.
Leases are about to be signed in Plano and Irving. Negotiations are ongoing in Allen, Arlington, Fort Worth and Euless. The company is still looking inside the Dallas city limits and McKinney.
Daiso, pronounced Die-so, is the largest “100-yen store” in Japan with more than 65 percent of the category’s market share. It has more than 2,800 stores in Japan and more than 600 in 28 countries. Its sales last year hit $3 billion.
Daiso entered the U.S. with one store in Seattle in 2005 and now has six in Washington and 40 stores in California.
“It’s challenging for us to add a new state, but Texas is an important market for us. We really believe in Texas and think it’s going to be stronger and stronger,” said Yoshi Murata, senior vice president for Daiso in the U.S.
Daiso is leaving a comfort zone on the West Coast, where there are large pockets of Asian populations, but what’s learned in Texas will help Daiso expand to other states, said Murata.“If we only focus on the Asian market, we are too limited,” he said.
About 60 percent of its U.S. customers so far are Asian, and stores do well with the Hispanic market too, he said.
In Japan, it’s opened stores in diverse locations, in office buildings and airports as well as in malls, streets and neighborhood shopping centers.
Daiso was recruited to Texas by Houston-based NewQuest Properties. NewQuest and Daiso expect to have 20 Texas stores open within 18 months. That number grows to 50 stores in three years, Murata said.
The developer is recruiting other Asian retailers to come to Texas and specifically for the Carrollton shopping center, said NewQuest broker Heather Nguyen. NewQuest is working with the city of Carrollton to redevelop the shopping center.
“We’re delighted that Daiso picked our city first,” said Carrollton Mayor Matthew Marchant at a news conference and ribbon cutting with several Daiso officials. “I have young daughters and I can see several items they will want to purchase.”
Nguyen shared her first reaction to a Daiso store: “It’s like unwrapping a beautiful present and getting a big surprise.”
Kay Ho, 43, of Carrollton was shopping at Daiso with her family Friday. Her father selected a couple of $1.50 neckties and tossed an $8 dress shirt in the shopping basket. “We will be back here. I love the bowls and so many things in the kitchen,” she said.
The operative words here are cute, fun, good idea and I didn’t even know I needed that. If the best creative merchants from Target and The Container Store got together to develop a dollar store, this would be it.
Daiso sells 10,000 products in just about every household category from kitchen, bath, laundry and closets to apparel, decorative accessories, gardening, gift wrap, office, hardware, pets, candy and cosmetics. Daiso says it sells 2 million neckties a year and 24 million false eyelashes (or one every 1.3 seconds).
Top-selling unique items include: steel soap that removes scents from your fingers, pore-cleansing face products, a heat sealer for snack bags and the perfect size bowl for pasta or pho.
Those items and most in the store cost $1.50 and a few are priced higher: $3 for leggings, $5 for HDMI cables and the most expensive item is a $7 yoga mat. About 99 percent of its products are its own private brands, and the company claims similar products that it sells for $1.50 cost $8, $9 or $10 at Target.
When chains such as Dollar General and Dollar Tree were forming and growing in the U.S., 100 yen stores were blossoming in Japan.
But like toy and electronics chains, supermarkets and office supply stores, the dollar store category has been forced to consolidate, as too many stores compete with each other, online shopping and new brick-and-mortar stores.
In July, Dollar Tree completed the $9 billion buyout of Family Dollar Stores after Dollar General also tried to buy it. Dollar Tree plans to close 330 Family Dollar stores, including 22 in Texas.
