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Consumer Discretionary

This Discount Retailer Is No Joke

By Peter Staas, on Jan. 19, 2017

Competition within the retail sector has grown increasingly cutthroat, thanks to consumers’ ability to compare prices and research products on their smartphones.

Meanwhile, Amazon.com (NSDQ: AMZN) continues to take market share from traditional retailers, with its Prime membership reaching an estimated 63 million households this year—up 43 percent from year-ago levels.

Just in time for the holiday season, the Dec. 17, 2016, issue of Capitalist Times Premium highlighted a software and business services company that helps brick-and-mortar franchises transition into the brave new world of omnichannel retailing. (See Your Wish Is Our Command.)

Our background research for that article made us wonder whether any profit pools in retail land can withstand the suction of Amazon.com’s tentacles—a fraught enterprise when you consider the strength and adaptability of the latter’s platform.

Besides automobile parts, one business model jumped out as a potential safe haven: brick-and-mortar retailers that specialize in closeouts and deeply discounted items.

Not only do these companies provide a value proposition that appeals to customers, but these outfits also offer a treasure hunt-like experience that keeps them coming back for more. With new merchandise rolling out each day, you never know what you’ll find.

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