New fred’s rising at site of former eyesore
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A new fred’s Super Dollar is going up on a Midtown corner once home to a notorious eyesore, the vacant and dilapidated Coach and Four Motor Lodge.
The Memphis-based discount retailer is building one of its new format stores at 1318 Lamar, where the hotel, opened as a Howard Johnson Motor Lodge in 1966, was razed a decade ago.
Fred’s Inc. is building a couple doors east of a Fam- ily Dollar of recent vintage at Lamar and Bellevue.
“It’s a discount dollar store battleground,” said Dave Mueller, Fred’s senior vice president of sales and marketing. “We’re all seeing a similar customer that’s a little financially challenged.”
That challenge is appearing far beyond Memphis. Dollar stores have sprouted across the nation as the economy continues to only slowly create new jobs in the wake of the 2008 financial meltdown. With job growth slow, the average U. S. household has given up 7 percent of its buying power since 2000 when adjusted for inflation, according to a recent study by Sentier Research of Annapolis, Md.
In Greater Memphis, where 40.4 percent of the households are impoverished or earn a low income, average family income plunged 12.5 percent to $45,400 between 2000 and 2010, according to a Brookings Institution report.
With even the middle class strapped for cash, the city has provided a bustling business for nearly 1,000 dollar stores, payday loan, rent to own, bail bond and title pawn shops running up more than $500 million in an- nual sales, according to a University of Memphis study of Memphis and Shelby County.
In this fertile market, Fred’s is expanding, trying to bring in shoppers who may have favored big supermarkets or drug stores in another time. The new store is expected to be open by year’s end, one of 19 fred’s in the Memphis metropolitan area, including about 10 of the new format store.
Fred’s, which has about 700 stores chain wide, opened the first proto-
type new store for Greater Memphis in Bartlett in 2009 and the most recent one in Southaven this summer.
The 19,000- squarefoot fred’s features wider aisles and updated lighting, shelving and signs. It has more groceries, i ncluding refrigerated and frozen foods, a larger pharmacy and more overthe-counter medications. The home décor, automotive and home repair departments also are expanded.
Where it’s going — the Coach and Four site — was labeled “arguably Midtown’s worst eyesore” in a 2001 city report. Af- ter the hotel closed in 1990, its condition raised the ire of code enforcement officials and drew protests from residents of surrounding historic neighborhoods.
Renaissance Memphis LLC acquired the property in 2003 from hotelier Richard “Sonny” Bauman, a longtime proponent of legalized horse racing in Memphis. The new owner touted plans to develop apartments and retail, but financing was an apparently insurmountable issue.
For Fred’s, whose stock closed Friday at $16.49, down 6 cents from Thursday, the expansion is part of a strategy to take on retailers and rivals like Tennessee-based Dollar General.
Two weeks ago, Fred’s Inc. reported sales for the month ended Aug. 3 up 4 percent to $142.2 million from $ 136.8 million in July 2012. Comparable store sales for the month increased 2.5 percent on top of a 1.2 percent increase in the same period last year.
Fred’s chief executive officer Bruce A. Efird said in a release that $ 482.3 million in total sales in the second quarter “underscore the impact of our reconfiguration plan initiatives, most notably with our expanded Hometown Auto & Hardware department — the first phase of our space productivity plan, and our efforts to leverage new opportunities in the pharmacy department.”