A new report shows that three “dollar store” brands account for almost half of the new retail store openings in the U.S. so far this year, reflecting the expansion of “dollar stores” in the retail market dominance, other retailers either closed or stopped opening new stores.
CNN reports that the latest data from market research firm Coresight Research shows that of the 3,597 store openings announced by major U.S. retail chains so far this year, about 45 percent came from Dollar General, Dollar Tree and Family Dollar.
These store openings underscore the continuation of the rapid growth trend of dollar stores that began before the Great Plague. Economists and retail analysts say the prevalence of dollar stores is due in part to the growing inequality between rich and poor and the hollowing out of the middle class in the United States. The percentage of adults living in middle-income households in the U.S. fell from 61 percent in 1971 to 51 percent in 2019, according to the Pew Research Center.
“There’s been a divide in the economy,” says Ken Fenyo, president and head of Coresight’s consulting and research division, “so the rich have been doing well since the Great Recession and continue to do well. But there are a lot of people who are not doing well, and ‘dollar stores’ strongly appeal to that segment of the population, which is the biggest reason for the popularity of ‘dollar stores.'”
Dollar Tree caters to a broad income bracket, while Dahl and Home Depot are primarily favored by low-income populations. Dollar Tree bought Family Dollar in 2015. Dollar stores are also starting to attract more affluent consumers looking for discounted essentials, Finyo said.
Inflation in the U.S. is currently on the rise and is expected to rise further in the summer as economic activity resumes in full swing, the paper said.
Dollar store CEO Todd Vasos said in March that company data showed an increase in new customers in the latest quarter compared with the same period last year, noting that these new customers are “younger and have higher incomes” compared with traditional shoppers.
The small size of the dollar stores allows them to operate in areas where other retailers can’t, Fenno said. “Dollar stores are typically under 10,000 square feet, while Walmart supermarkets typically cover 180,000 square feet and other grocery stores typically cover about 40,000 square feet.
Finyo said, “Compared to Walmart, Target or other larger stores, ‘dollar stores’ are more easily integrated into local neighborhoods, and that certainly means they can open in more places.”
PNC chief economist Faucher (Gus Faucher) said, “dollar stores” by the impact of online shopping is relatively small. Faucher said, “dollar stores” to carry most of the goods are food and daily necessities, and is for immediate consumption, people will rarely buy such goods online.
Other discount retailers have also opened new stores this year, including Five Below, Burlington Stores, Aldi and others.
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