While many mid-priced brands and fast-fashion retailers have seen better times of late, the good old-fashioned dollar store has continued to thrive. As Modern Retail reports, data from e-commerce analytics firm Edge by Ascential reveals that discount retail stores have grown faster than other retail sectors in the United States. .
According to the numbers, non-food or discount retailers are expected to grow at an annual rate of 5.2% through 2024. Meanwhile, discount food stores (the equivalent of our No Frills) are expected to grow at 4.9. %. On the other hand, supermarkets are expected to grow at a more modest rate of 4.4 percent and large stores at a rate of 2.7 percent.
The report found that more than 900 Dollar General stores are slated to open south of the border, in addition to a net increase of 160 Dollar Tree and Family Dollar discount stores.
Here in Canada, I don’t need to tell you that the dollar store game is strong, with that impossible-to-ignore green and yellow Dollarama sign that is familiar in and around Toronto.
In fact, new stores seem to have sprung up everywhere. The rapidly growing company is currently valued at an impressive $ 3 billion.
Also (as you probably know), far from being a staple for pens, balloons, and candy, Dollarama has increased its offering in recent years. The retailer offers items similar to big box suburban staples like Walmart and Canadian Tire, but at more affordable prices.
Items typically range from $ 1 to $ 4, and price increases are kept to a minimum – something customers know they (and their wallets) can count on.
Dollarama has also started accepting credit cards in recent years, reaching out to a new type of customer base.
The typical dollar store customer changes, after all. In the United States, it’s the wealthiest customers – those who earn $ 70,000 a year or more – who have the most impact in the dollar store industry, according to the New York Times.
This demographic comprises over 22 percent of the customer base. In some cases, the bells and whistles of the shopping experience make no difference to offer seekers.
Because dollar stores lack all of the frills and more sophisticated design of traditional retail outlets, discount retail spaces are relatively affordable to open and overhead costs are kept to a minimum. These retailers forgo advertising and keep the spaces as basic as possible, terrible lighting and everything. And it works.
Another key factor in Dollarama’s success is its venture into the world of counterfeits.
As Meagan Campbell points out in a recent Macleans article, the key to dollar store success is selling cheap knockoffs of more expensive brands. From crayons and liquid soap to toys, they’re pretty much exact copies of the real stuff, with similar packaging – right down to the color of the packaging and accompanying text.
There are some differences, but they are so subtle that some customers may not realize at first glance the difference between the counterfeit and the brand they have known and loved for years.
The game of counterfeits – but not without its occasional lawsuits – is hugely lucrative, as Dollarama continues to make money from the higher profit margin that comes from selling products at a fraction of the cost of the real thing. For the most part, the retailer is doing it.
While the rise in popularity of online shopping has resulted in the death of physical locations for many mid-range (RIP) brands, the dollar store seems spared the shift to shopping via a screen.
After all, most people have a Dollarama store within walking or driving distance. The thing about dollar stores is that they are often quick fixes, responding to convenient last minute purchases like Halloween costumes or gifts – something the online world can’t. to do.
In Canadian cities like Toronto and Vancouver – where ridiculously high housing costs leave little extra money – discount shopping may be more of a necessity than a last-minute fix. In today’s world, there is no shame in being strategic about the dollars you spend (and save).
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