Dollar Stores Go Corporate As Big Chains Put Indie Discounters Out Of Business

Image courtesy of diaper

Across the country, the Dollar Store Wars mean that the national chains Dollar Tree, Dollar General, Family Dollar, and Dollar Express are fighting it out across the country for customers’ affection and brand loyalty. National chains have taken over just about every other retail category, so will independent dollar stores be able to survive?

The New York Times looked into the national expansion of dollar and small discount store chains after the national chain Dollar Tree began expanding into New York City in earnest. The city still has a thriving variety of dollar stores and variety stores, and these retailers have needed to figure out how to fend off the national chains.

Who are these chains, anyway?

The chains moving into New York City for the first time are Dollar Tree and Dollar General, which have slightly different business models in spite of their similar names. Items in Dollar Tree stores typically sell for $1 or less, and items in Dollar General stores might be smaller than their counterparts at Walmart, but have corresponding lower prices. Both categories of store cater to people who want general merchandise and are pinching pennies.

Dollar stores have doubled their sales since 2006

That may not be enough in the long run, though. Low prices mean that cash registers need to constantly be ringing. While shoppers have largely kept up our dollar store habit, especially older Millennials who formed their early adult spending habits during the recession, there are just too many stores in some areas and not enough customers. One analytics firm calculated that there were 20,543 dollar stores in 2006, and 30,496 ten years later. Sales more than doubled in the same period, but this may represent the growth of national and a few regional chains, not independent dollar and discount stores.

Economies of scale mean that an independent store may not be able to match the quality and variety of merchandise that a national discounter has, but there are other ways to stand out and win over customers. One store in Brooklyn says that it distinguishes itself with customer service, anticipating what neighborhood customers want and offering a free coffee station so they’ll come hang out. Another store in the Bronx has focused on Hispanic shoppers in its neighborhood, stocking food staples, drinks, and snacks targeted at them.

“The chains are growing rapidly at the expense of the independents,” the owner of a company that supplies independent dollar and discount stores told the Times. “When they open up one chain store, they destroy five or 10 independent stores.”

Watch for your local independent and chain dollar stores and small discount stores to expand their food offerings, tailor their selection more to your neighborhood, and improve their customer service. This expansion is happening against the backdrop of drama among the dollar stores and dollar-ish stores, as the spun-off chain Dollar Express sues Dollar Tree.

Consider supporting your locally-owned dollar and discount stores if they’ve been valuable to you, and keeping one form of low-end independent retail around.