For decades, dollar stores were known primarily as venues where consumers could actually buy various products for a buck each. But while some merchandise is still available at that price point, dollar stores have been experimenting with higher-priced retail concepts in order to expand their product selection and move closer to “one-stop-shop” status. In particular, “Dollar-near” retailers like Five Below and pOpshelf – which from the get-go offered nearly all products for less than $5 – have been carving out a market amongst a more affluent consumer base. We analyzed the latest location intelligence metrics for these brands to better understand the consumer behaviors driving their recent success.
Analysis of last year’s visits reveals just how strong 2022 was for Five Below and pOpshelf. And it’s likely that recent inflationary concerns were a driving force behind the retailers’ foot traffic boom as new visitors in search of value were drawn to the brands.
In the first half of 2022 Five Below and pOpshelf had similar visit growth, but in the second half of the year – and the first three months of 2023 – pOpshelf’s visit growth outpaced Five Below, in part due to its rapid exponential growth.
As the 2022 holiday season rolled around, pOpshelf’s rate of expansion exposed many new consumers to the brand, many of which have clearly stuck with the retailer in the first few months of 2023. By March 2023, Five Below and pOpshelf’s visits were up 32.6% and 130.6%, respectively, compared to January 2022.
Stretching A Dollar
While inflationary pressures on the consumer undoubtedly played a part in the recent visit growth of both brands, pOpshelf and Five Below have also been implementing fleet expansion plans that have shown to drive visits. pOpshelf launched in 2020 and currently has about 150 standalone stores, while Five Below – which has been on the scene for over 20 years – has nearly 1,400 locations. As the two brands expand their footprints, year-over-year (YoY) visits per venue show that both retailers are on the right track.
Since June 2022, Five Below has sustained visits per venue at levels near or exceeding that of the previous year. The consistent visits per venue numbers indicate that consumers continued to flock to new stores as they did to veteran locations.
pOpshelf had considerable YoY visits per venue gaps midway through 2022, but these likely had to do with the brand’s rapid expansion. Completing 2021 with 55 standalone stores, pOpshelf grew to 140 venues in 2022 – a 154.6% increase. By comparison, in 2022 Five Below added 150 locations – a relatively large number, but only a 12.6% increase in total stores from the previous year.
In essence, pOpshelf front-loaded its fleet with many new stores that have begun to fill with traffic. pOpshelf’s YoY visits per venue gap has been closing in recent months and in March 2023 was only 12.7% below the previous year. This indicates that as the brand grows, new locations are successful in attracting fresh visits.
Many Ways to Treasure Hunt
Even though both pOpshelf and Five Below both fill the demand for a wider array of products at relatively low price points, visitors to the two retailers exhibit different consumer behavior. And one component that differentiates these brands is Five Below’s expansion beyond the $5 price ceiling. The addition of “Five Beyond'' sections in a growing number of Five Below stores – where merchandise is priced upwards of $5 – brings an additional element to the store experience. While maintaining its value perception in the eyes of inflation-weary visitors, offering higher-priced items means Five Below visitors find a wider product assortment.
On the other hand, pOpshelf has maintained a $5 price cap on most items while offering an expanded selection of non-consumables – likely contributing to the “fun shopping experience” and “treasure hunt” aspect of the store.
This could be why during Q1 2023 pOpshelf visitors were more likely to visit on a weekend and spend more time browsing. Meanwhile, Five Below visitors were more likely to visit the store on a weekday – when they likely had less time to browse store shelves at length and instead made mission-driven trips for essentials and other specific merchandise.
Store fleet expansion, inflationary woes, and higher-priced product offerings are all driving the rise in discount store foot traffic. pOpshelf and Five Below share aggressive expansion plans for the near future as well as a price-conscious consumer base. Clearly, the growing market for discount retailers has room for both brands and can accommodate a variety of consumers – including those who want merchandise at $5 or less and those willing to spend a bit more.
For updates and more data-driven foot traffic insights, visit Placer.ai.