Dollar Store Traffic Up 14% Despite Brick-and-mortar Decline

The dollar store segment is seeing a boost in consumer activity despite the overall decline in brick-and-mortar shopping, according to new research from The NPD Group.

In fact, shopper visits were up 14 percent in dollar stores for the quarter ended July 2014, compared to the 4 percent decline for physical retail overall. The dollar store channel posted the largest year-over-year share increase in shopping visits, which NPD attributes in part to new store openings.

Marshal Cohen, chief industry analyst for NPD, noted that shoppers visit dollar stores with the intent to buy something, not to browse, adding that "dollar store traffic has been increasing over the past few years because they have expanded their selection of products, making the channel even more useful and pleasing to price-savvy consumers.”

Three-quarters of all shoppers in the dollar store channel purchase one or more items during each visit, and the amount they spend is up 3 percent on average since last year. Additionally, in the past two years, the dollar store channel shopper has become younger, with 50 percent under 45 years of age, compared to 42 percent two years ago.

Cohen made note of the 16-24 age group in particular, which has increased its number of overall brick-and-mortar visits, with 11 percent growth among males, and 4 percent among females.

“Millennials are increasing their activity in the market, because as much as online and mobile channels are ingrained in their brain, shopping is still a social behavior for this group," Cohen added.

As the dollar store channel presents a greater competitive concern to the grocery industry, Progressive Grocer has covered extensively the recent upheaval among the three largest discount retailers. In prior months, Dollar General has made attempts to derail a pending merger between Family Dollar and Dollar Tree, with Dollar General resorting to a hostile takeover attempt of the Charlotte-based discounter. As of the latest development in this ongoing saga, Family Dollar has urged its shareholders to reject the offer citing antitrust concerns.