Dollar Stores' Slow Sales Aren't Cramping Expansion Plans
The two biggest dollar store chains in the United States are set to open hundreds of locations despite cooling sales. Dollar Tree and Dollar General are planning to launch over 1,300 new stores this fiscal year, according to a report by The Wall Street Journal.
Although this number is lower than last year and with Dollar Tree closing several Family Dollar locations, it still surpasses the expansion plans of other retailers. This move indicates the chains' confidence that new stores can drive sales and increase market share.
Dollar stores are currently facing challenges such as reduced consumer spending, heightened competition from other discount retailers, and a disadvantage in e-commerce compared to companies like Target and Walmart who are investing in omnichannel shopping experiences.
According to a report, Peter Keith, a senior analyst at Piper Sandler, mentioned that the trend towards digital shopping is becoming increasingly popular, particularly among middle- and upper-income consumers.
Dollar General's management recently stated their adoption of digital tools and in-store experiences to drive sales. CEO Todd Vasos emphasized the importance of enhancing customer engagement and checkout experiences through increased employee presence at the stores.
Meanwhile, Dollar Tree introduced a new multi-price format aimed at diversifying its product range with items priced between $1.50 and $7. This strategy aims to enhance the shopping experience and attract a broader customer base without raising prices on existing products.
The most recent retail sales data from the U.S. Census Bureau revealed a slight slowdown in consumer spending in August. Overall retail sales saw a marginal increase of 0.1% month over month, with non-store retail sales, often considered a barometer for e-commerce, rising by 1.4%.
