Table of Contents
Executive Summary
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- Overview
- Channel vitality
- What you want to know
- What we see
- The dollar store consumer
- What you want to know
- What we see
- Role of the dollar store
- What you want to know
- What we see
- Barriers to shopping the channel
- What you want to know
- What we see
- Leading retailers
- What you want to know
- What we see
- What it means
The Market – What You Need to Know
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- Still growing strong
- Not immune to competition
- Population growth trends buoy the channel
Market Size and Forecast
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- Strong momentum continues for dollar channel
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- Figure 1: Revenues of dollar stores and other general merchandise stores, at current prices, 2014-24
- Figure 2: Revenues of general merchandise stores*, by type, at current prices, 2014-24
Market Breakdown
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- Figure 3: Share of revenues of general merchandise stores*, at current prices, 2014-19
- Figure 4: Revenues of general merchandise stores*, by type, at current prices, 2014-19
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Market Perspective
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- Dollar stores’ value proposition helps consumers of all ages and incomes with their financial goals
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- Figure 5: Current financial situation, by age, May 2019
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- Figure 6: Financial priorities – Any rank (net), May 2019
- Competitive threats abound
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- Figure 7: Retailers shopped, August 2017
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- Figure 8: In-store retailers for grocery shopping, February 2019
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- Figure 9: Where consumers plan to shop during 2019 holidays – Any shopping (net)
Market Factors
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- America’s diversification aids the channel
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- Figure 10: Population by race and Hispanic origin, 2013-23
- Figure 11: Retailers shopped – Any (net), by Hispanic origin and race, October 2019
- Youth population set to grow
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- Figure 12: Distribution of generations by race and Hispanic origin, 2018
- Figure 13: Population by age, 2013-23
- Household income rises, giving dollar stores permission to more aggressively pursue higher-income Americans
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- Figure 14: Median household income, by race/Hispanic origin of householder, in inflation-adjusted dollars, 2007-17
- Figure 15: Household income distribution, by race and Hispanic origin of householder, 2017
- The state of the economy impacts dollar stores’ business
Key Players – What You Need to Know
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- Leaders are continuously looking to improve and grow
- The little dollar stores that could
- Fred’s and Hollar face challenges
- Amazon always a lingering threat, even if not a current threat
Retailer Overview
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- Omnipresence results in strong sales story
- The Leaders
- Dollar General
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- Figure 16: Dollar General sales and store count, 2012-18
- Figure 17: Dollar General Facebook carousel ad, November 2019
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- Figure 18: Dollar General’s percentage of net sales by major product group, 2016-18
- Dollar Tree / Family Dollar
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- Figure 19: Combined Dollar Tree and Family Dollar sales and store count, 2012-18
- Figure 20: Dollar Tree sales and store count, 2012-18
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- Figure 21: Family Dollar sales and store count, 2012-18
- Figure 22: Dollar Tree’s percentage of net sales by major product group, 2018
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- Figure 23: Family Dollar’s percentage of net sales by major product group, 2018
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- Figure 24: Dollar Tree e-mail ad, November 2019
- Five Below
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- Figure 25: Five Below sales and store count, 2012-18
- Figure 26: Five Below’s percentage of net sales by major product group, 2018
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- Figure 27: Five Below Facebook video ad, November 2019
- 99 Cents Only
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- Figure 28: 99 Cents Only sales, 2015-17
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- Figure 29: 99 Cents Only how-to video, November 2019
- The Laggards
- Fred’s
- Hollar.com
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- Figure 30: Hollar.com e-mail ad, November 2019
What to Watch
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- Amazon should always be on the radar
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- Figure 31: Attitudes toward Amazon, by select demographics, October 2019
- Not everyone loves dollar stores; more scrutiny and restrictions may be forthcoming
The Consumer – What You Need to Know
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- Sector is gaining traction
- Shopping frequency is split between heavy and light shoppers
- Loyalty? What loyalty?
- Consumables are top purchased items
- Ecommerce (or lack thereof) is not a barrier . . . yet
- Improving quality perceptions and product selection of foods/beverages should be a priority
The Dollar Store Consumer
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- Dollar stores help consumers manage their financial goals, and more people are shopping as a result
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- Figure 32: Year-over-year change in shopping incidence, October 2019
- Consumers are split: either they go to dollar stores multiple times a month or not much at all
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- Figure 33: Shopping frequency, October 2019
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- Figure 34: Shopping frequency, by select demographics, October 2019
- Dollar store shoppers get in and get out
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- Figure 35: Time spent shopping, by select demographics, October 2019
Retailers Shopped
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- More people are gravitating to dollar stores to take advantage of cost savings
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- Figure 36: Retailers shopped, 2019 versus 2016, October 2019 and September 2016
- Consumers think most dollar stores are the same, leading to low loyalty
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- Figure 37: Retailers shopped, by retailers shopped, October 2019
- Hollar.com works for some, but not for others
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- Figure 38: Time spent shopping, by Hollar.com, October 2019
Categories Purchased
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- Consumables top the shopping list
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- Figure 39: Categories purchased, October 2019
- Seven in 10 shoppers purchase four items or less
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- Figure 40: Repertoire of categories purchased, October 2019
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- Figure 41: Attitude toward loyalty at dollar stores, by repertoire of items purchased, October 2019
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- Figure 42: Repertoire of categories purchased – 7 or more, by demographics, October 2019
Food/Beverage Items Purchased
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- Food improvements are being noticed, but more work to be done
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- Figure 43: Food/beverages purchased, October 2019
- Frequent shoppers do more grocery shopping at the dollar store
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- Figure 44: Food/beverages purchased, by shopping frequency, October 2019
- Food/beverage opportunities
- Succeeding in grocery requires going beyond price
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- Figure 45: Attitudes toward in-store grocery shopping, February 2019
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- Figure 46: Attitudes toward dollar stores, by key demographics, October 2019
Shopping Habits
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- Most purchases are made on impulse
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- Figure 47: Shopping habits, October 2019
- Women are more easily distracted at the dollar store
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- Figure 48: Shopping habits, by gender and age, October 2019
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- Figure 49: Budgeting behaviors, by household income, October 2019
- Dollar stores buck the trend when it comes to ecommerce
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- Figure 50: Online shopping habits, October 2019
- Men 35-54 exhibit digital preferences
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- Figure 51: Online shopping habits, by gender and age, October 2019
Attitudes toward Dollar Stores
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- Advantages
- Stores viewed as offering value and fun
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- Figure 52: Attitudes toward prices and product offerings, October 2019
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- Figure 53: Attitude toward price versus product selection, by select demographics, October 2019
- Opportunities
- Expand and improve product selection, especially in food/beverage
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- Figure 54: Attitudes toward product and brand selection, October 2019
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- Figure 55: Attitudes toward product and brand selection, by age and income, October 2019
- Elevate omnichannel offerings with an eye toward boosting ecommerce
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- Figure 56: Attitudes toward digital offerings, October 2019
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- Figure 57: Attitudes toward digital offerings, by select demographics, October 2019
- Threats
- Little brand loyalty and signs of potential attrition
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- Figure 58: Potential risks for dollar stores, October 2019
- Young men are losing interest
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- Figure 59: Potential risks for dollar stores, by gender and age, October 2019
- Gen Z also rather apathetic about the channel
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- Figure 60: Attitudes toward dollar stores, by generation, October 2019
Barriers to Shopping the Channel
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- Appealing to “the other 20%” may be challenging and cost more than it’s worth
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- Figure 61: Reasons for not shopping the channel, October 2019
- Conversion is possible
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- Figure 62: Openness to shopping the channel, October 2019
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Market
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- Figure 63: Revenues of dollar stores and other general merchandise stores, at inflation-adjusted prices, 2014-24
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Appendix – The Consumer
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- Figure 64: Dollar stores shopped, past three months, August 2015-19
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- Figure 65: Dollar stores purchased at, past three months, August 2014-19 vs 2015-19
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- Figure 66: Retailers shopped, by key demographics, October 2019
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- Figure 67: Categories purchased, by retailers shopped, October 2019
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- Figure 68: Time spent shopping at dollar stores, by repertoire of items purchased, October 2019
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