Perhaps you think that dollar stores were a quaint anachronism, surviving only through sales to immigrants. In reality dollar stores are the fastest growing retailers in America. Here are a few facts:
1. More than 4000 new dollar stores have opened in the last three years, an increase of thirty-four percent.
2. The dollar store sector accounts for $16 billion a year, larger than the recorded music industry.
3. Dollar General, a very large chain, will add 625 stores this year.
4. Dollar stores compete on price and convenience, most of all parking and easy access to the goods. The “big box” superstore is proving vulnerable to dollar stores, just as centralized shopping malls are proving vulnerable to the big boxes.
5. Dollar stores offer no frills and spend nothing on marketing.
6. Families earning $70,000 and above are the fastest-growing group of customers for dollar stores. Dollar stores are beginning to lose their dowdy image.
7. Dollar stores are starting to attract name brands on the shelves.
8. Wal-Mart, feeling the competitive heat, is experimenting with “dollar store” sub-sections in some of their superstores.
My take: For me it is all about easy parking. I am starting to get the hang of dollar stores, it is the easiest way to replenish a dwindling supply of toothpaste.
The above facts are from the 10 May issue of Business Week, “Out-Discounting the Discounter.”