Reasons Why The Nearest Dollar Store Is On The Rise

When it comes to the rise of dollar stores, the numbers are somewhat staggering. Three-fourths of Americans live within five minutes of the nearest dollar store, currently the largest US retail chain by store count.

While retailers across the country are closing at a record pace, the dollar store is adding almost 2000 stores over a period of two years.

This is not the just story of one company doing well. Discount stores dominated the list of retailers with new store openings in 2019. These stores even provide tough competition to several popular stores such as Walmart and Starbucks.

Dollar Store Overview

It has long been believed that these types of discount stores thrive when the economy tanks. But the roaring economy with record-breaking stock market highs has turned that adage on its head.

The stronger economy is doing nothing to stop discount stores. Between 2011- the end of the great recession and 2018, there were 10,000 new dollar stores added, with a 50% increase in total number.

Why are the dollar stores expanding at such a rapid rate? These are the factors driving the growth.

An Oasis Or Mirage?

As per research, some 2.3 million Americans live more than a mile away from a grocery store and don’t have a car. In these places, access to groceries a challenge. Those living in food deserts have to invest more time and money in getting good.

Now, the wide availability of the nearest dollar store might seem an easy solution, since homeowners can easily buy whatever they need.

Apart from that, the dollar stores offer fresh food items, even though for a limited time. This means buyers don’t need to run here and there looking for farm-fresh food items.

Smaller Quantities= Lower Price Tags

A sizable percentage of the dollar store customer base earns far less than the average American. About 57% of dollar store’s customers live in households’ earnings less than $50,000 and about 30% in those earning than $25,000.

Dollar stores thrive by keeping prices low. In some instances, that means working with retailers on smaller packaging, offering toilet paper, for example, in single rolls.

While the cost volume ratio might be higher at a discounter than a warehouse store, for customers focused on stretching that week’s paycheck, price wins.

The size of the nearest dollar store matters too. Dollar store, in particular, has a deep connection with its customers and frequently surveys them on how they’re doing.

A typical dollar store is 7500 square feet, stocked with fewer than 10,000 items and requiring minimum employees at any given time.