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A variety store sells a wide range of small, low-cost items popular with consumers. The merchandise offered may have different prices or all items may have the same price. Items for sale in these stores normally include household items, toys, cleaning materials, snacks and office supplies. Depending on the physical size of the store, more varieties of items may be offered, but all goods are typically perceived to be good consumer values.
The original model for the variety store was the five and dime store, often called dimestores. These retailers sprung up in the late 1800s, and no items for sale cost more than ten cents. Dimestores were found in almost every first world country.
By the 1900s, this concept was no longer viable as prices increased with industrialization and free market trade. The name, however, hung on until the late 1900s, when the traditional dimestore was supplanted almost worldwide by dollar stores. Similar to the dimestores of the past, many dollar stores quickly changed their policy of pricing every item at one dollar. Most offer heavily discounted products of which many, but not all, cost one dollar.
The typical variety store is able to keep its prices low based on several factors. A large percentage of brands sold is often private label or generic goods. These are frequently popular products that are made with less expensive materials and cheaper manufacturing processes than comparable goods sold at higher retail prices.
Other items may be grey market goods. This category includes merchandise that has been obtained through legal but often unauthorized or unofficial channels of distribution. These wares are commonly ones that were originally produced for a foreign market that sells them to a third party based on poor sales in the original market.
Items that are discontinued are also commonly found at a variety store. While they are typically free of defects, they may be slow sellers based on their connection with a past event such as a movie opening or past international sporting event. Music CDs and DVDs that did not fare well in traditional retail marketplaces are often found in discount variety stores as well.
The economic success of a typical variety store is frequently based on two factors. Buying and selling huge amounts of goods at heavily discounted prices provides a small per item profit that is offset by the volume of sales. The second factor that often contributes to the store’s profit margin is pricing a substantial number of items at prices that are higher than regular retailers. These goods are commonly purchased by consumers who perceive the prices to be bargains based on the other heavily discounted items in the store.