Dollar Stores Hot Sector in Retailing

Dollar stores are one of the hottest high-growth sectors in retailing. This sector includes the one-price general merchandise stores and closeout stores and is responsible for sustaining the current momentum in retail sales.

Dollar stores have posted some of the highest growth rates across retiling in recent years, largely due to rapid expansion, solid sales gains and increasing consumer interest in this type sales channel. This retail sector has increased in sales growth since 2001 and is forecast to continue growing as dollar stores continue to make inroads into mainstream retailing.

Another Decade of Growth for Dollar Stores

A study by Retail Forward estimated that enough untapped and under-penetrated geographic markets exist in the U.S. to support another 15,000 dollar store retail outlets. Besides the new store expansion opportunities, the sales gains by existing stores factor into this growth equation.

Leading players are driving store traffic and upping transaction size by adding more high-turn consumables and improving in-store presentation. They are also investing in the infrastructure (facilities, distribution networks, technology, and personnel) to help manage bigger businesses.

Retail Change Agents

You could say that the dollar stores have become retail change agents because they are changing the way America shops. They’re changing the competitive landscape and the way bulk merchandise suppliers view this retail channel.

Changes in Shopping Habits

Dollar stores are gaining in popularity and market share as consumers recognize their price/value/convenience proposition in increasing numbers. Retail Forward’s proprietary consumer database indicates that the percentage of U.S. household shoppers patronizing dollar stores goes up monthly. This is a clear indication that the sector is making its way into the mainstream shopping patterns of American consumers. It means that formats such as conventional supermarkets and drug stores will likely lose market share to the dollar store phenomenon. To fight defection, more conventional players will integrate dollar concepts into their own stores.

Changes for Suppliers

By taking consumers and market share away from competitive retail formats, dollar store retailing is creating the opportunity for more suppliers to cash in. More manufacturers will align with the one dollar store sector to develop new products, dollar store items, bulk merchandise or special packaging that meet the specific needs and specifications of these retailers.

The dollar stores include: 99-cent stores and/or independent dollar stores selling general merchandise. Manufacturers who advertise with TopTenWholesale and affiliates primarily specialize in general merchandise, off price goods, closeouts, and novelties. Retailers can find these wholesalers on TTW and resell the goods to dollar stores both on- and offline.