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Description

Description

Covered in this report

For the purposes of this report, dollar stores are defined as retailers selling deeply discounted merchandise including name brand and private label products such as food, household supplies, health and beauty care and more, typically ranging in price from $1-20. Some dollar stores are known as single-price stores, offering one price for all merchandise in stores. Dollar stores include but are not limited to:


  • Family Dollar
  • Dollar General
  • Dollar Tree
  • 99 Cents Only
  • Fred’s
  • Five Below

"Dollar stores continue to benefit from consumers’ love of treasure hunt shopping as well as their willingness to make trade-offs on brand names and selection in order to get the lowest possible prices on some everyday, low-involvement products. Consumers have an affinity for dollar stores because of these aspects, but they aren’t loyal and their expectations are increasing, both of which are challenges that dollar stores must tackle to secure their future. While leading retailers are focused on opening new stores and expanding/improving product selection, immediate opportunities for improvement exist around in-store experiential retailing, ecommerce, grocery and overall quality perceptions."
- Diana Smith, Associate Director - Retail & Apparel


This Report will cover the following areas:

  • Channel vitality
  • The dollar store consumer
  • Role of the dollar store
  • Barriers to shopping the channel
  • Leading retailers

What's included

What's included

Table of contents

Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • 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

                                          • Still growing strong
                                            • Not immune to competition
                                              • Population growth trends buoy the channel
                                              • Market Size and Forecast

                                                • Strong momentum continues for dollar channel
                                                  • 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

                                                  • 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
                                              • Market Perspective

                                                • Dollar stores’ value proposition helps consumers of all ages and incomes with their financial goals
                                                  • Figure 5: Current financial situation, by age, May 2019
                                                  • Figure 6: Financial priorities – Any rank (net), May 2019
                                                • Competitive threats abound
                                                  • Figure 7: Retailers shopped, August 2017
                                                  • Figure 8: In-store retailers for grocery shopping, February 2019
                                                  • Figure 9: Where consumers plan to shop during 2019 holidays – Any shopping (net)
                                              • Market Factors

                                                • America’s diversification aids the channel
                                                  • 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
                                                  • 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
                                                  • 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

                                                  • 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

                                                          • Omnipresence results in strong sales story
                                                            • The Leaders
                                                              • Dollar General
                                                                • Figure 16: Dollar General sales and store count, 2012-18
                                                                • Figure 17: Dollar General Facebook carousel ad, November 2019
                                                                • Figure 18: Dollar General’s percentage of net sales by major product group, 2016-18
                                                              • Dollar Tree / Family Dollar
                                                                • Figure 19: Combined Dollar Tree and Family Dollar sales and store count, 2012-18
                                                                • Figure 20: Dollar Tree sales and store count, 2012-18
                                                                • Figure 21: Family Dollar sales and store count, 2012-18
                                                                • Figure 22: Dollar Tree’s percentage of net sales by major product group, 2018
                                                                • Figure 23: Family Dollar’s percentage of net sales by major product group, 2018
                                                                • Figure 24: Dollar Tree e-mail ad, November 2019
                                                              • Five Below
                                                                • Figure 25: Five Below sales and store count, 2012-18
                                                                • Figure 26: Five Below’s percentage of net sales by major product group, 2018
                                                                • Figure 27: Five Below Facebook video ad, November 2019
                                                              • 99 Cents Only
                                                                • Figure 28: 99 Cents Only sales, 2015-17
                                                                • Figure 29: 99 Cents Only how-to video, November 2019
                                                              • The Laggards
                                                                • Fred’s
                                                                  • Hollar.com
                                                                    • Figure 30: Hollar.com e-mail ad, November 2019
                                                                • What to Watch

                                                                  • Amazon should always be on the radar
                                                                    • 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

                                                                    • 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

                                                                                • Dollar stores help consumers manage their financial goals, and more people are shopping as a result
                                                                                  • 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
                                                                                  • Figure 33: Shopping frequency, October 2019
                                                                                  • Figure 34: Shopping frequency, by select demographics, October 2019
                                                                                • Dollar store shoppers get in and get out
                                                                                    • Figure 35: Time spent shopping, by select demographics, October 2019
                                                                                • Retailers Shopped

                                                                                  • More people are gravitating to dollar stores to take advantage of cost savings
                                                                                    • Figure 36: Retailers shopped, 2019 versus 2016, October 2019 and September 2016
                                                                                  • Consumers think most dollar stores are the same, leading to low loyalty
                                                                                    • Figure 37: Retailers shopped, by retailers shopped, October 2019
                                                                                  • Hollar.com works for some, but not for others
                                                                                    • Figure 38: Time spent shopping, by Hollar.com, October 2019
                                                                                • Categories Purchased

                                                                                  • Consumables top the shopping list
                                                                                      • Figure 39: Categories purchased, October 2019
                                                                                    • Seven in 10 shoppers purchase four items or less
                                                                                      • Figure 40: Repertoire of categories purchased, October 2019
                                                                                      • Figure 41: Attitude toward loyalty at dollar stores, by repertoire of items purchased, October 2019
                                                                                      • Figure 42: Repertoire of categories purchased – 7 or more, by demographics, October 2019
                                                                                  • Food/Beverage Items Purchased

                                                                                    • Food improvements are being noticed, but more work to be done
                                                                                      • Figure 43: Food/beverages purchased, October 2019
                                                                                    • Frequent shoppers do more grocery shopping at the dollar store
                                                                                      • Figure 44: Food/beverages purchased, by shopping frequency, October 2019
                                                                                    • Food/beverage opportunities
                                                                                      • Succeeding in grocery requires going beyond price
                                                                                        • Figure 45: Attitudes toward in-store grocery shopping, February 2019
                                                                                        • Figure 46: Attitudes toward dollar stores, by key demographics, October 2019
                                                                                    • Shopping Habits

                                                                                      • Most purchases are made on impulse
                                                                                        • Figure 47: Shopping habits, October 2019
                                                                                      • Women are more easily distracted at the dollar store
                                                                                        • Figure 48: Shopping habits, by gender and age, October 2019
                                                                                        • Figure 49: Budgeting behaviors, by household income, October 2019
                                                                                      • Dollar stores buck the trend when it comes to ecommerce
                                                                                        • Figure 50: Online shopping habits, October 2019
                                                                                      • Men 35-54 exhibit digital preferences
                                                                                        • Figure 51: Online shopping habits, by gender and age, October 2019
                                                                                    • Attitudes toward Dollar Stores

                                                                                      • Advantages
                                                                                        • Stores viewed as offering value and fun
                                                                                          • Figure 52: Attitudes toward prices and product offerings, October 2019
                                                                                          • Figure 53: Attitude toward price versus product selection, by select demographics, October 2019
                                                                                        • Opportunities
                                                                                          • Expand and improve product selection, especially in food/beverage
                                                                                            • Figure 54: Attitudes toward product and brand selection, October 2019
                                                                                            • Figure 55: Attitudes toward product and brand selection, by age and income, October 2019
                                                                                          • Elevate omnichannel offerings with an eye toward boosting ecommerce
                                                                                            • Figure 56: Attitudes toward digital offerings, October 2019
                                                                                            • Figure 57: Attitudes toward digital offerings, by select demographics, October 2019
                                                                                          • Threats
                                                                                            • Little brand loyalty and signs of potential attrition
                                                                                              • Figure 58: Potential risks for dollar stores, October 2019
                                                                                            • Young men are losing interest
                                                                                              • Figure 59: Potential risks for dollar stores, by gender and age, October 2019
                                                                                            • Gen Z also rather apathetic about the channel
                                                                                              • Figure 60: Attitudes toward dollar stores, by generation, October 2019
                                                                                          • Barriers to Shopping the Channel

                                                                                            • Appealing to “the other 20%” may be challenging and cost more than it’s worth
                                                                                                • Figure 61: Reasons for not shopping the channel, October 2019
                                                                                              • Conversion is possible
                                                                                                • Figure 62: Openness to shopping the channel, October 2019
                                                                                            • Appendix – Data Sources and Abbreviations

                                                                                              • Data sources
                                                                                                • Sales data
                                                                                                  • Fan chart forecast
                                                                                                    • Consumer survey data
                                                                                                      • Abbreviations and terms
                                                                                                        • Abbreviations
                                                                                                          • Terms
                                                                                                          • Appendix – The Market

                                                                                                              • Figure 63: Revenues of dollar stores and other general merchandise stores, at inflation-adjusted prices, 2014-24
                                                                                                          • Appendix – The Consumer

                                                                                                              • Figure 64: Dollar stores shopped, past three months, August 2015-19
                                                                                                              • Figure 65: Dollar stores purchased at, past three months, August 2014-19 vs 2015-19
                                                                                                              • Figure 66: Retailers shopped, by key demographics, October 2019
                                                                                                              • Figure 67: Categories purchased, by retailers shopped, October 2019
                                                                                                              • Figure 68: Time spent shopping at dollar stores, by repertoire of items purchased, October 2019

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