Editor’s Note: Price isn’t everything
You get what you pay for.
At Dollar Tree, a leading dollar store chain that operates under the Dollar Tree and Family Dollar banners, the desire to keep prices low appears to be getting them into trouble with the Food and Drug Administration. In mid-November, the FDA issued a warning letter to the chain for receiving adulterated over-the-counter items produced by foreign manufacturers.
According to CNN, the letter outlines “multiple violations” of manufacturing practices at those contract manufacturers used to produce Dollar Tree’s Assured brand of over-the-counter drugs, as well as other drug products sold at Dollar Tree and Family Dollar stores. The FDA, in the letter, requested that Dollar Tree implement a system to ensure that it does not import adulterated drugs. The retailer also was cited for not testing raw materials or finished drugs for pathogen and quality.
In response, Dollar Tree executives said that they are cooperating with the FDA and plan to meet with officials at the agency.
To me, at least, I see this as a case of getting caught with your hand in the cookie jar. While I have no proof of intent here, it appears, if these allegations are true, that Dollar Tree officials are so focused on keeping price points down that they turned — intentionally or not — to sometime unsavory characters to help them reach their goals.
In the end, cutting corners never works. The short-term benefits of doing business with these manufacturers always are countered by the long-term effects of their practices. Consumers, and sometimes even government agencies, can be fooled some of the time. But, in the end, it is important that retailers realize that a short-term gain may end up costing them big bucks and, perhaps even worse, bad publicity that can have a lasting and potentially fatal impact on the business operation.
All retailers are under intense pressure to keep price points lower than their competition and to offer their shoppers the best possible value for their merchandise. But, there comes a point where the potential immediate savings can end up costing that retailer — or manufacturer — big time.
I like to think that the retailers I know are in this for the long run and want to do everything they can to make their customers feel comfortable with the products purchased at their stores, especially their private label and store brand items, so that they will keep coming back time and time again.
Price does matter. But having a consumer base that has confidence in your stores — and the products inside — is much more important.