This is a rush transcript from "Your World With Neil Cavuto," July 10, 2009. This copy may not be in its final form and may be updated.
STUART VARNEY, GUEST HOST: It's Christmas in July for some of the nation's retailers, Kmart and Sears rolling out the holiday merchandise extra early, hoping to get shoppers in a merry mood and start spending.
But my next guest doesn't need a Santa display to bring in the business. His stores are already packed.
He's Eric Schiffer, CEO of the 99 Cents Only Stores.
Eric, am I right in saying that the most successful — successful 99 Cents Only Store is in Beverly Hills, California? Is that true?
ERIC SCHIFFER, CEO, 99 CENTS ONLY STORES: That's correct. It's on Wilshire Boulevard, right next to Beverly Hills.
VARNEY: And how do you account for this?
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SCHIFFER: Well, I think I think, of anybody, rich people like to save money, too, and they appreciate a good bargain. And, if you go to that store, you will see Mercedes-Benz, BMWs, and an occasional Rolls-Royce in that parking lot.
And it's — it's a great location, and it's right there on Wilshire Boulevard, which is our — kind of our — like our Fifth Avenue...
VARNEY: Yes.
SCHIFFER: ... here in Los Angeles.
VARNEY: Now, you sell only items that cost 99 cents or less, right, nothing over 99 cents in your stores? Is that accurate?
SCHIFFER: Well, actually, about six months ago, nine months ago, we actually raised our price, because of price pressures, to 99.99 cents.
(LAUGHTER)
VARNEY: Sir, that is a gimmick. Eric, you know that is a gimmick. Now, you have got to give me that one, OK?
(LAUGHTER)
SCHIFFER: I will give it to you. But that 1 percent makes a big difference for us.
But nothing is over a buck, like you said.
VARNEY: Sure.
SCHIFFER: And — and I think that's — that's significant, when stores — the store you're talking about next to Beverly Hills did over $11 million. So, that's a lot of foot traffic.
VARNEY: Now, that's an interesting story, because, I mean, it's one of the wealthiest parts of the country. And it's your best store, best- performing store.
SCHIFFER: That's right.
VARNEY: My question is, is this a sign of the times? We know the rich have gotten clobbered. Is it a sign of the times, that that's why they're now going to 99 Cents Only?
SCHIFFER: Well, that's — that's always been our best store, since it opened in 1994.
And we have 272 stores in every kind of neighborhood you can imagine. But we have seen the sales there get better and better over the years. And — and — and, in areas where — other upscale areas, not Beverly Hills, but other upscale areas, we're seeing increases in our sales.
And we just announced our sales numbers yesterday.
VARNEY: Yes.
SCHIFFER: And what we announced is that the number of transactions, which measures customer count, increased 6 percent. And we believe a lot of middle- to upper-income customers are coming in.
VARNEY: Well, is it a permanent shift, this trend away from the brand-name stuff, and go cheap, go discount, go low-end? Is — is that a permanent shift, or will everything come back to normal when the economy recovers?
SCHIFFER: Well, in our stores, we're different than the dollar stores that you would see on the East Coast. We're 50 percent food, and perishable...
(CROSSTALK)
SCHIFFER: We sell probably about 20 percent perishable foods, including produce.
For example, this week, we have pineapples for 99.99 cents, or watermelons, and — or a dozen eggs. So, I think people — why would people go back, is the question I have...
VARNEY: Yes.
SCHIFFER: ... when we have — we have name brands. Over 50 percent are name brands. We have great quality.
I think the toughest thing for us over the years is to get an upscale or an educated consumer to come in for the first time, because the more educated you are, the more you're taught that, if something is a low price...
VARNEY: Sure.
SCHIFFER: ... there's got to be something wrong with it.
VARNEY: Yes, you're right.
SCHIFFER: But the fact — the fact is, it's not. And why would they go back, when they can get the same item or the similar item for a much lower price?
VARNEY: That's a good question. And it's good for your business.
Eric Schiffer, 99 Cents Only Stores, thank you very much for joining us, sir.
SCHIFFER: Thank you, sir, for having me on.
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