Dollar stores Dollar Tree and Dollar General plan to open over 1,300 new stores this fiscal year. This is fewer than last year but still more than other retailers’ expansion plans. The chains believe new stores can help increase sales and market share.
However, they face challenges like declining spending among low-income customers and competition from big-box retailers such as Walmart and Target. These competitors have an advantage with their online shopping and delivery options, while Dollar Stores rely more on in-person shopping.
Dollars have always had this large niche in retail because they combine value and convenience,” said Peter Keith, a senior analyst for Piper Sandler. He added that for many consumers, “the shift toward this digital shopping has become the new convenience play. ”
Dollar General is using digital tools to improve in-store experiences and boost sales.
Dollar stores expand despite challenges
We have increased the employee presence at the front end of our stores, with our associates committed to providing a friendly, welcoming, and elevated level of engagement to our customers while also facilitating a positive checkout experience,” the CEO said. Meanwhile, Dollar Tree announced a new format with items priced between $1.50 and $7. The goal is to offer new products at higher prices to enhance the shopping experience and draw in more customers.
Recent Census Bureau figures showed that while consumers were still spending in August, the pace had slowed. Overall retail sales rose 0.1% from the previous month. Non-store retail sales, often seen as a proxy for e-commerce, increased 1.4%.
Despite the challenges, Dollar Tree and Dollar General remain committed to expanding. They see it as key to driving growth and gaining market share.
