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Gourmet Taste on 99 Cents Budget

California

August 08, 2002|MELINDA FULMER | TIMES STAFF WRITER

Discount gourmet food may sound like a contradiction in terms. But that's what City of Commerce-based 99 Cents Only Stores is promising.

On Wednesday, the 140-store chain unveiled the first of its gourmet fancy food sections at a new location in Sacramento.

These sections will be rolled out at all its stores within a year, said company Chairman Dave Gold.

Outfitted with wood rather than metal shelving, and a separate neon sign, these sections will peddle overstocked and discontinued items such as cans of crab, shiitake mushrooms and imported chocolate. Even imported Cabernet Sauvignon will be available at selected stores.

The idea for a gourmet section sprung from the chain's brisk premium wines sales at a few stores in the Los Angeles area, something it has not been able to roll out across the chain because of the difficulty of getting liquor licenses.

Although discount stores such as 99 Cents Only might not seem like a draw for affluent consumers, AC Nielsen research shows that 41% of all households with incomes above $70,000 shopped at a dollar store last year.

With 99 Cents' move, dollar stores may be willing to cater to these big-spending customers, who analysts say see dollar stores as a sort of economic sport.

99 Cents Only's top-grossing storeis on Wilshire Boulevard near Beverly Hills.

"It's amazing how broad their reach and appeal is," said Bob Buchanan, director of A.G. Edwards Inc.'s retail research group.

"You look at their parking lots, and there are inexpensive cars, but also BMWs and Mercedes," Buchanan said.

Although gourmet fancy food might seem redundant, Gold said he feared that some customers might be unsure about what "gourmet" means, so he tacked on fancy as well.

Shares of 99 Cents Only Stores fell 38 cents to $22.07 on the New York Stock Exchange.

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