The NPD Group’s update on the brick-and-mortar market confirms the rise of the dollar store is real. From May 2014 to July 2014, shopping visits to dollar stores climbed 14 percent—a bright spot in the brick-and-mortar sector that was down 4 percent overall, the global information company reported. Three-quarters of all dollar store shoppers made a purchase, and the amount spent on average increased 3 percent since last year.
Dollar stores’ increase was likely due to new store openings, a driving factor that NPD Group chief industry analyst Marshal Cohen noted not many other retailers are doing, choosing to focus instead on maximizing conversion to purchase and expand their online footprint.
Cohen said, “Consumers walk into a dollar store with the intention to buy, not to browse, and almost always walk away with something. In addition, dollar store traffic has been increasing over the past few years because they have expanded their selection of products, making the channel even more useful and pleasing to price-savvy consumers.”
Few groups are as price-conscious as Millennials, which are discovering the perks of dollar stores. The report indicated that dollar store channel shoppers have become younger, with 50 percent under 45 years of age, compared to 42 percent two years ago.
Cohen said, “Millennials are increasing their activity in the market, because as much as online and mobile channels are ingrained in their brain, shopping is still a social behavior for this group. Seeing and touching, as well as researching and deciding where to purchase a product, are all important aspects of their shopping experience.” He added, “This omni-channel and omnipresent age group also seeks instant gratification and at the lowest price, which is why younger consumers are also increasing their dollar store visits.”
While the future owner of Family Dollar Stores Inc. remains unknown as Dollar General Corp. and Dollar Tree Stores are embroiled in a bidding war for the discount retail chain, expect to see more dollar stores in the near future. In June, Dollar General announced it would open stores in three new states, including Maine, Rhode Island and Oregon by early 2015, and if Dollar Tree successfully acquires Family Dollar, it will become the nation’s largest dollar store retailer with 13,000 stores in 48 states and in Canada.