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Some like it hot, but many shoppers prefer it to be cheap(er).
Retailers like Dollar General, Dollar Tree, and Five Below have seen a jump in visits to their stores, according to a report from foot traffic analytics firm Placer.ai. Visits to discount and dollar locations grew by over 11% when compared to the same time a year ago, the firm found.
The discount sector has seen the most robust foot traffic growth, placing it ahead of grocery stores like Aldi and Trader Joe’s, as well as fitness centers like Crunch and Planet Fitness, and even superstores like Costco, Walmart, and Target, the report notes.
Costco did lead the way in foot traffic growth for superstores at least, coming ahead of both Target and Walmart. But even so, dollar stores have increasingly grown as an option for shoppers in search of affordable food choices.
In the inflation economy, value continues to reign supreme, and as consumers look to better manage their wallets in the face of stubbornly high prices and economic uncertainty, some retailers stand to win more than others.
For Dollar General, expanding its footprint and its grocery offerings has helped it lure the frugal shopper (even if that’s meant yanking their self-checkout kiosks). During the first quarter, Dollar General opened 197 new locations, CEO Todd J. Vasos said during the company’s earnings call in May.
At the time, Vasos told investors that sales were being driven entirely by its “consumable category,” which he said was in reference to “customers relying on us for the value of the items they need most often for their families,” according to a FactSet transcript of the call.
Meanwhile, while competitor Dollar Tree has seen a modest rise in sales, its subsidiary Family Dollar has largely lagged. In June, Dollar Tree said that it was mulling a potential sale of the brand.
In March, Dollar Tree said that it would close nearly 1,000 underperforming Family Dollar stores, after it posted a $1.7 billion loss during its fourth quarter. Those closures were meant to reallocate investments to remaining locations that showed growth potential, Dollar Tree CEO Rick Dreiling said at the time.