VALUE TENANTS: A cut above
May 1, 2001 12:00 PM, Dean A. Wieber
Retailers offering more for less are becoming supremely popular tenants. Current trends withstanding, Americans still want a big bang for their buck. How else can you explain the increasing popularity of dollar stores — even among those capable of spending much more? The truth is, these retail concepts appeal across many demographic and income levels. Some value stores are among the top companies in the country. You can find them everywhere from urban malls to suburban neighborhood centers as they continue to expand and prosper. In the following pages five such value stores — Great Clips, Save-A-Lot, 99 Cents Only, Dollar Tree, One Price Clothing — share stories of success.
While Minneapolis, Minn.-based Great Clips may already be the nation's largest chain of hair care salons, the company's preeminent goal is to be the dominant brand in the $50 billion-a-year industry.
“For about seven years in a row we've been the fastest growing brand in North America,” says Dean A. Wieber, the chain's senior vice president of real estate. “A couple of years ago we surpassed Super Cuts and Fantastic Sam's to become the largest brand in North America. However, we want to have a position much more dominant than our arguably number one position,” says Wieber.
Great Clips has achieved its market position by offering value pricing and convenience. Its 1,445 salons are located in suburban neighborhood and community centers, often near a grocery store anchor. Unlike a mall, these locations allow customers to park near the shop and get in and out quickly. More than 33% of Great Clip's visits are part of a single purpose round trip from home. For this reason, ease of access is important.
Hair care at Great Clips is value priced, with adult cuts costing $10-$13 across the country and children and seniors $2 less. “We have unisex pricing,” explains Wieber. “We have a very clear menu board in all of our salons delineating all of our pricing.”
The chain also emphasizes quality in both hair cuts and in customer service. Great Clips operates training centers in each major market. At these centers, everyone from managers to stylists to receptionists are instructed in customer relations.
“If anybody is ever dissatisfied with their hair care experience, often times it is related to the customer's experience — not with the quality of the cut,” explains Wieber. “The way Great Clips control's this is with an intensive amount of training that holds up the service to the high levels that are necessary to get repeat business,” says Wieber. “We want to keep the men coming back for haircuts every four weeks and the women every six weeks,” he continues.
In the future, Great Clips will be targeting a younger median-age audience, says Wieber. “We're also going to look for larger household sizes that to us represent families. If all criteria is met and you've got a quality piece of physical property, the deal probably works for us,” says Wieber.
The privately held company currently operates in 73 markets across the United States and Canada; 170 new salons opened in 2000, another 200 are online for 2001. In order to position Great Clips as the undisputed, number one national brand, the company is striving to make every store an easy commute from wherever its customers may live.
Contact: Dean A. Wieber, senior vice president, real estate, Great Clips for hair, 3800 West 80th St. Suite 400, Minneapolis, Minn. 55431; 952.893.9088.
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