Discount and Dollar Stores Continue to Gain Customers

Placer.ai report highlights resiliency and appeal of value chains

2/24/2023

Dollar Tree’s Q2 Highlights Bright Spots Amid Some Concerns

Dollar Tree saw a 10% bump in shopper traffic from January 2022 to January 2023, Placer.ai reports.

Many consumers are flocking to discount and dollar stores as inflation hovers at high rates and as the overall economic outlook remains uncertain. According to a new report from Placer.ai, visits to those outlets are outpacing trips to grocery stores, shopping centers and superstores.

The foot traffic analytics firm found that visits to discount and dollar stores are up 19.4% versus the pre-pandemic January 2020, a useful three-year stack for comparison. Last year was a good year for these channels, as growth continued across most months and came in higher than 2021.

Placer.ai also looked at traffic by banner and found that shopper visits rose 10% at Dollar Tree and 3.7% at Family Dollar on a year-over-year (YoY) basis in January. “And though Dollar General did experience a decrease in visits compared to January 2022, the difference was the smallest YoY visit gap the chain has posted in the past four months,” pointed out Placer.ai’s Bracha Arnold in a recent blog post on the report.

Some of the strong performances can be attributed to the growing number of discount and dollar stores, as chains continue to expand their respective footprints around the country. That said, Placer.ai’s data shows that average visits per venue are climbing and are an indicator of sustained demand. Compared to January 2019 levels, traffic was up 13.3% at Dollar Tree, 17.9% at Family Dollar, 4.4% at Dollar General and 22.21% at Five Below.

Persistent inflation is extending the appeal of discount and dollar stores that grew in favor during the pandemic. “As people look for ways to save money on groceries, discount stores have become a popular choice, creating a challenge for traditional grocery stores. And since the large footprint of most dollar and discount stores puts most Americans within several miles of a store, the category’s strength is likely to continue in 2023,” Arnold noted.

Dollar General will share the full financial report for its fiscal 2022 fourth quarter and full fiscal year on March 16. The recently company released preliminary results indicating that sales came in lower than expected due to a variety of factors. Dollar Tree, meantime, is set to posts its fourth quarter fiscal earnings on March 1.

Chesapeake, Va.-based Dollar Tree operated 16,231 stores under the Dollar Tree, Family Dollar and Dollar Tree Canada banners across 48 states and five Canadian provinces as of July 30. The company is No. 29 on The PG 100, Progressive Grocer’s 2022 list of the top food and consumables retailers in North America. Goodlettsville, Tenn.-based Dollar General operated 19,000 stores in 47 states as of Jan. 28. The company is No. 15 on The PG 100.