Dollar Stores Step up Race to Add Locations Amid Consumer Shift

Dollar stores and discount retailers are racing to meet consumer demand by adding locations.

Dollar General and Dollar Tree, together, expect to have opened 1,300 new stores during fiscal 2022, while Five Below and TJX Cos. have each added more than 100, The Wall Street Journal reported Tuesday (Dec. 20).

With these store openings, they are working to meet the needs of residents of rural areas as well as the interest in cost savings among consumers in all regions, according to the report.

In rural areas, dollar stores have found that they are less likely to face competition from other kinds of major retail chains or from Amazon, they can beat the retail prices of local grocers, they can benefit from lower costs of labor and operations, and they can provide local shoppers with convenience and value that’s not otherwise available in these regions, the report said.

In all areas, these stores accommodate other trends in the marketplace. They have found that younger consumers are especially interested in saving money on household goods so that they can spend it on other things, that shoppers of all ages are looking for relief from inflation and that customers are increasingly going to dollar stores for groceries, per the report.

To cater to this consumer shift, dollar stores plan to continue adding new locations in 2023. They’re also rolling out new initiatives. For example, Dollar General is increasing the number of stores that carry fresh produce and expanding its Popshelf concept that features home, craft, toy and beauty products aimed at higher-income shoppers, according to the report.

As PYMNTS reported Dec. 1, Dollar General plans to execute another 3,170 real estate projects in the United States in fiscal year 2023, including 1,050 new store openings, 2,000 remodels and 120 relocations.

“We are excited about our plans to extend our ability to serve more customers and believe we are well-positioned to continue delivering long-term sustainable growth and value for our shareholders,” Dollar General CEO Jeff Owen said in a Dec. 1 press release.

Similarly, Dollar Tree is continuing a system-wide remodeling and store refresh program aimed at focusing on the growing demand for consumables and meeting the needs of customers in hard-hit rural areas where retail choice is often limited.

“We are developing an assortment to meet our shoppers’ family needs as they are looking to save money by dining at home,” Dollar Tree CEO Mike Witynski said Nov. 22 during a quarterly earnings call.

For all PYMNTS retail coverage, subscribe to the daily Retail Newsletter.