The pandemic has helped Americans appreciate the value of a dollar – and a dollar store.
According to a third quarter report from Colliers International South Carolina, discount store activity is intensifying during the pandemic as consumers seek to purchase products at cheaper prices near their homes.
âWhat we are seeing is that discount stores are the big winners in the pandemic,â said Patrick Nealon, partner at Colliers of Charleston Brokerage. âDollar General’s net sales for the third quarter of 2020 are up 25% year over year, and that’s huge. “
Dollar Tree and Family Dollar, owned by the same company, both saw a 10% year-over-year increase.
While Five Below, a chain that sells books, clothing, and more for under $ 5, has seen only a small increase in overall sales, it opened 62 locations in 2020 and will continue to open. more, Nealon said. The company, which has a location in Mount Pleasant’s Wando Crossing, has entered the well-capitalized pandemic and Nealon believes it will emerge from the downturn in the economy unscathed.
For the third quarter, the three biggest rental deals in Charleston, according to Colliers, were two grocery stores – a Lowes Foods on Ashley River Road and an Earth Fare on Folly Road – and the Dollar General at 3886 Savannah Highway on Johns Island.
Nealon said shoppers were drawn to discount stores to save money during the recession, and also because these stores are typically located near residential areas.
âDuring the pandemic, while people are working from home, it’s easier to go to a dollar store and pick up smaller things if you’re in a rush,â Nealon said. âPlus, for those with greater concerns during the pandemic, a discount store’s smaller footprint makes it easier to get in and out without unnecessary exposure. “
Stores like Big Lots, which have seen their inventories increase 60% this year, Nealon said, have also been able to capitalize on demand for essentials as they diversify their products. Unlike other stores that temporarily closed, Big Lots had the added benefit of being able to stay open during the pandemic.
As people confined to the house scoured plans to spruce up their homes, they found they could head to Big Lots and buy mattresses, kitchenware, home decor, and then pick up the essentials in one. only stop.
Nealon noted that not all discount stores fare equally well. Sales of TJ Maxx and Marshalls fell dramatically during the pandemic.
âThey too have entered the pandemic well capitalized to be able to meet operating expenses and stay afloat, unlike companies like JC Penney that have gone bankrupt,â he said. âBut historically the most significant growth has been the year after the recession. They are doing their best during a declining economy, so they are looking to bounce back in 2021. “
A main issue for TJ Maxx and Marshalls was supply chain delays. For anyone who walked into either establishment during the pandemic, the shelves were bare at first, and not from frenzy of shopping. The chains struggled to route shipments and even temporarily shut down their websites.
âAfter the pandemic you have the bargain hunters and the people looking for deals because of the recession, but during the pandemic everything that was open and selling essentials worked well,â Nealon said. . âWalmart, Target, and dollar stores all sell items at a lower price and are more convenient. “
Contact Teri Errico Griffis at 843-849-3144.