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Checking in With Discount & Dollar Stores

Lila Margalit
February 29, 2024
Checking in With Discount & Dollar Stores

Discount & Dollar stores thrived in 2022 and 2023, as inflation drove many shoppers to trade down and seek out cheaper retail alternatives. But how has the category continued to fare in the new year? Have stabilizing prices led shoppers away from discount chains? Or have dollar stores cemented their position as go-to retailers even when money isn’t quite as tight? 

We dove into the data to find out.

January 2024: Holding Onto Gains 

Over the past two years, Discount & Dollar Stores have emerged as major disruptors, diversifying both their offerings and their price points  – and the category leaders’ continued visit growth suggests that this strategy is helping the chains build significant strength. By investing in private label food items and stocking fresh produce at thousands of locations, Dollar General has established itself as a prime low-cost grocery destination. Family Dollar, owned by Dollar Tree, has also made strong inroads into the supermarket scene, with everything from fruits and veggies to cage-free eggs. Dollar Tree has also broadened its grocery selection to include an array of chilled and frozen foods.

In January 2024, Discount & Dollar Stores saw a further increase in year-over-year (YoY) visits, building upon the category’s impressive post-COVID gains. Most of the analyzed category leaders also saw YoY visit jumps – no small feat given these retailers’ strong 2022 and 2023 performance.

Sustained Seasonal Growth in the Bargain

Zooming out on the longer-term visitation trajectories of leading discount chains shows just how well positioned the category remains for continued success. Compared to a January 2020 pre-COVID baseline, visits to Dollar General and Dollar Tree were up 24.3% and 14.0%, respectively, in January 2024. While these foot traffic increases were undoubtedly fueled in part by the continued expansion of the chains’ footprints, they highlight strong and growing demand for the category’s bargain fare. 

The chains’ visit patterns also reveal clear seasonality in visitation patterns to leading Discount & Dollar Stores, with the chains emerging as holiday shopping destinations. Dollar Tree, which continues to price most items at $1.25, experiences more pronounced seasonal peaks, with visits spiking during the holiday season. And though Dollar General has firmly positioned itself as a year-round destination for essential goods, it too sees foot traffic spikes in December. 

The Secret to Discount Chains’ Success

The emergence of Discount & Dollar chains as affordable venues for much-needed necessities has been a major factor in the segment’s success. But the category’s strong positioning as a key holiday shopping player has also helped solidify its place in the nation’s retail landscape. 

And looking at monthly fluctuations in the median household income (HHI) of Discount & Dollar Stores’ captured markets shows a subtle but distinct HHI spike during the peak holiday season – meaning that the category draws its audiences from slightly more affluent areas during this all-important time of the year. This trend may be a further indication of the mainstreaming of dollar stores – with higher-HHI consumers especially likely to seek out their bargain-priced quality merchandise in the runup to Christmas. 

Key Takeaways

Since COVID, Discount & Dollar Stores have solidified their position as mainstream shopping destinations for everything from basic food items to home goods and party supplies. And if January 2024 is any indication, you can bet your bottom dollar on the category’s continued strength heading into the new year. 

Follow for more data-driven retail analyses.

This blog includes data from Data Version 2.0, which implements improvements to our extrapolation capabilities, adds short visit monitoring, and enhances visit detection.

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