Thanks for Visiting!

Register for free to get the full story.

Sign Up
Already have a account? Log In

Competition Heating Up for Discount and Dollar Stores

Shira Petrack
February 28, 2022
Competition Heating Up for Discount and Dollar Stores

Dollar and discount stores gained momentum over the pandemic, and recent data indicates that these superstores are largely holding onto their strength. So while Walmart is still the undisputed leader of discount retail, the rise of alternative value retailers is beginning to impact the power dynamics in the sector. To better understand these shifts, we dove into foot traffic and consumer demographic data for the legacy discount retail giant as well as for Family Dollar, Dollar General, Five Below, Big Lots, and Dollar Tree.

Discount Superstores Strengthened by Pandemic

Dollar and discount stores thrived over the past two years. In the early days of the pandemic, mission driven shoppers and consumers affected by COVID’s economic impact came for the value pricing and the wide selection of product offerings that could be found in a single place. By the time the wider retail sector re-opened and the economic situation stabilized, consumers had already incorporated discount and dollar superstores into their regular shopping routines. 

Year-over-two-year (Yo2Y) visit numbers show that discount superstores now hold a significantly stronger position than they did pre-COVID. In December ‘21 alone, Family Dollar, Dollar General, Five Below, Big Lots, and Dollar Tree saw 20.4%, 28.2%, 34.1%, 3.0%, and 13.7% more visits, respectively, than they had received in December ‘19. 

Walmart’s Customers Increase their Cross-Shopping 

But the elephant in the value retail lane remains Walmart. Walmart saw a 0.3% Yo2Y visit increase – a good performance, especially in light of the Omicron wave, but not nearly as impressive as the double-digit visit growth at some of its competitors. And the data shows Walmart’s relatively low offline growth coupled with discount retailers’ massive visit jumps are somewhat correlated: Cross-shopping metrics indicates that at least some of the increased visits to discount superstores come from Walmart shoppers. 

Between 2018 and 2021, the share of Walmart shoppers who also visited another discount superstore increased across the board. For example, only 18.5% and 6.4% of Walmart shoppers visited Dollar General and Five Below, respectively, in Q4 2018. By Q4 2021, those numbers had jumped to 23.4% for cross-shopping to Dollar General and 10.5% for cross-shopping to Five Below. This seems to indicate that at least some of these discount retailers’ strength is coming at the expense of Walmart. 

And as the chart below shows, the increase in cross shopping began pre-pandemic – which means that the pandemic was not the sole driver of these brands’ success. While COVID may have given these chains a boost, Dollar General, Five Below, and others have been building their brands for years and expanding their retail locations, and are now reaping the fruits of that labor. 

Walmart and Discount Superstores Targeting the Same Audiences 

It might seem odd to compare Walmart to Family Dollar or Five Below, given how massive Walmart’s reach is compared to other discount superstores – but customer demographics data shows that the brands target the same types of customers. All the chains analyzed in this report cater primarily to lower-income shoppers. 

Whereas 45% of the the general population reported earning under $50,000/year in the period between December ‘20 and November ‘21, 59%, 54%, 52%, 50%, 48%, and 47%, of customers to Family Dollar, Dollar General, Walmart, Five Below, Big Lots, and Dollar Tree, respectively, reported earning under $50,000/year in the same period. High-income consumers are also underrepresented in these brands’ customer demographics compared to the national benchmark. 

It seems, then, that Walmart’s target audience overlaps significantly with the target audience of the growing discount brands. This can explain the increase in cross-shopping between Walmart customers and other discount retailers, and confirms that Walmart is no longer the only value-focused superstore in the market. 

Walmart Still the Visit Leader – But Its Visit Share is Slipping 

Analyzing each brands’ visit share in Q4 ‘21 shows that 69.4% of the overall visits for the six discount brands still went to Walmart. Critically, however, this is down from the 75.8% visit share Walmart enjoyed in Q1 2019. 

Walmart may still rule the discount superstore sector – but brands like Dollar General, Dollar Tree, and Five Below are solidifying their position. So while Walmart’s position as discount e-commerce leader remains secure, the offline discount superstore sector is getting increasingly crowded – and competition is heating up. A big element of this shift is the massive expansion plans for brands like Dollar General, while Walmart’s far larger fleet can hardly grow at the same rate. 

It is clear that while Walmart has less overall visits than it had before, its foot traffic lead is still massive. Yet, the rise in competition could impact decision making for Walmart moving forward. From an increased emphasis on pharmacy and health services to a great focus on innovation-driven channels like rapid fulfillment and delivery, Walmart is looking to expand its impact on a per-store basis while also spreading into newer areas. This may be enough to enable the brand to maintain its uniquely strong position – even in an increasingly competitive market.

For more data-based retail insights, visit

Get 3 brand & industry
breakdowns every week

Subscribe to the newsletter

Great! Prepare your inbox for data-driven insights...
Oops! Something went wrong while submitting the form.

Get a Demo

Please enter your first name
Please enter your last name
Please provide a valid email
Please enter your email
Please enter company name

Thanks for reaching out!

One of our experts will be in touch soon

Try Free
Oops! Something went wrong while submitting the form.
How Will Primark’s US Expansion Impact Target?
All Eyes on Eyewear
Northwestern U.S. Grocery Dive
Return of the Lunch: Salad Chains Are Thriving
Retail Media Networks – Off the Beaten Track
Bet Your Bottom Dollar: Discount and Dollar Stores Drive Foot Traffic
Ulta & Lululemon: Discretionary Spending On The Up
The Score After Q1: Sporting Goods Chains
Who Uses NYC Airports: Biting Into The Big Apple’s Main Transport Hubs
Off Price: Strength in The Face of Retail Challenges
Visits Improve for Home Improvement
Walmart, Target & Wholesalers in Q1 2023 – The Return of Mission-Driven Shopping?
Department Store Roundup: Q1 2023 Office Index: April 2023 Recap Mall Index, April 2023 – A Rebound on the Horizon?
How Will Bed Bath & Beyond’s Bankruptcy Impact the Retail Space?
Buffet Restaurants: Filling Up on Foot Traffic
Thrift Stores: Vintage Visits Drive New Age in Apparel
The Windy City: A Hub of Post-Pandemic Opportunity
Diving into Dining Traffic - Q1 2023
Bring On The Joe
A Dollar (or more) For Your Thoughts: Five Below and pOpshelf
Dining Out With The Cheesecake Factory
Retail Foot Traffic Recap – March 2023
Digging Into 2023: McDonald’s and Chipotle Update Office Index: March 2023 Recap
How Did Key Retail Categories Perform in Q1 2023?
Northeastern USA Grocery Dive
Movie Theaters Storylines for 2023
Ollie's Bargain Outlet: Discounters are Evolving
Leveraging Brick-and-Mortar Retail in 2023
America’s Evolving Work Patterns: A Deep-Dive into New York and Chicago Mall Index March 2023
Tuning Into Record Stores
Five Franchises To Watch in 2023
What’s Next For Domestic Tourism?
It’s Showtime! Movie Theaters in the Spotlight
5 Limited Time Offers (LTOs) Driving Restaurant Traffic
Department Store Deep-Dive: Belk
Regional Grocery Chains Staying Ahead of the Competition
Five Chains that Rightsized for Success
Unlocking the Potential of Offline Retail Media Networks
Dining Out With Darden
What’s in Store for Self-Storage?
Nike & lululemon Update: Strong Performance Amid Expansion Plans
Many Ways to Win: Midwest Grocery Deep Dive
Retail, Reinvented: The Rise of the Pop-Up Shop
Navigating a New Normal in Business Travel & Commutes Office Index: February 2023 Recap
Retail Categories Staying Strong in Volatile Environment
Ulta Beauty: Poised for Success into 2023 Mall Index February 2023: Reasons for Continued Optimism
Catching Up With DICK’s & Hibbett
The Miami-Dade Arena: An Advertising Slam Dunk
Car Washes Revving Up Visits
Tuesday Morning and Sunrises in Home Furnishing
Dining & Valentine’s Day Recap
2023: The Year of the Discount Store
Aldi’s Success Highlights Growing Demand for Value Groceries
5 Retail & Service Categories Holding onto Pandemic Gains in 2023
Visitor Insights from Super Bowl 2023
2023 First Look: Home Improvement Update
How Are Target, Walmart, and Wholesale Clubs Faring in 2023?
Department Store Deep-Dive: Nordstrom
Off-Price: Taking Off in Uncertain Times
Checking in On Middle-Class Hubs
Who Attends the Super Bowl? Office Index: January 2023 Recap
Focusing On Fitness: Q4 and January Recap Mall Index: January 2023 – Returning Mall Normalcy?
Location Intelligence Insights Into Concert Attendance
Winning Dining Strategies for 2023
In-N-Out Burger: What to Expect as the Brand Moves East
Location Intelligence Breakdown: Coffee Caps-Off 2022
Digitally Native Brands Lean Into Brick & Mortar
Washington, D.C. Population Changes & Migration Trends
A Location Intelligence Perspective on Macy’s Rightsizing
Amazon-Powered Shopping: The Future of Brick-and-Mortar Grocery?
Cold Weather, Hot Visits: Diving into Winter Resorts
Wawa and 7-Eleven: Leaning Into the “Slurpee Effect”
2022 and Beyond: Catching Up With McDonald’s & Chipotle
Let’s Have Some Fun! Going Out Is In’s Q4 2022 Quarterly Index Adds Industry Executives to Leadership Team To Drive Company's Next Phase of Growth
5 Emerging Retail Formats: 2023’s Brick-and-Mortar Evolution
Grocery Update: Zooming in on the Lone Star State
2022 Office Recap: The Year of the TGIF Work Week
What Lies Ahead for Brick-and-Mortar Luxury in 2023 Mall Indexes: December 2022 Recap
Looking Back on 2022’s Holiday Shopping Season
Post-Pandemic Migration Trends in New York
Top Retailers for 2023
The Live Sports Advertising Opportunity
Domestic Migration to the Mountain States: Small Shifts with Big Implications
New Year, New Food: 5 Dining Trends For 2023
This is Why Shop-in-Shops Are Everywhere
Super Saturday 2022 Recap
The San Francisco Shift
Grocery Year-End Update: Publix in the Spotlight