Dollar Stores: One Of Humanity’s Greatest Inventions

Dollar stores have become the favorite destination of millennials, male and female Americans between 18 and 34-years-old. Millennials are also often characterized by higher spending power, and they are typically presumed to earn more money than the average American.

Reuters recently discovered that more than a quarter of dollar store customers are actually Millennials. The source says the following.

“Of the millennials who shopped at Dollar General, Dollar Tree and Dollar Tree-owned Family Dollar stores, in the year ended April, about 29 percent earned over $100,000 a year and accounted for about a quarter of sales at these stores.”

Apparently, a lot of things have changed in recent years. After all, it has been a common perception that low-income groups are the most frequent shoppers at the typical dollar store. Reuters offers an explanation for the significant change as follows.

“Dollar stores have worked hard to shed the image that they cater to lower-income groups and have invested in retaining customers who traded down from big retail stores after the recession. Stocking a wider variety of consumables, beauty products, and over-the-counter drugs, the interiors of dollar stores now look very much like a Walmart or Target store.”

Apart from dollar stores shedding their old image, the source also explains millennials’ strategy behind their growing dollar store patronage. They tend to be found “[s]pending less on everyday stuff and splurging on big-ticket items like cars and homes.”

In Canada, the annual profits of dollar stores are soaring, according to CTV News. “Sears Canada reported a $63.6 million net loss in its first quarter ended April 30… Dollarama, [a dollar store chain] on the other hand, recorded a 28.4 per cent jump in its net income in the first quarter.”

It wasn’t always this way. A long time ago, the lowly dollar store, according to Bloomberg, was actually losing business. In fact, “the dollar stores‘ rise was more than a century in the making.”

Bloomberg takes readers on a trip down memory lane to show how what started as a unique concept with a few setbacks over the years, has now gone mainstream. As economic depressions happen, expect the dollar stores trend to continue.

“Good times for dollar stores, bad times for shoppers,” says the New Yorker.

“Every three years, the Federal Reserve conducts a survey to get a measure of how American families are doing financially. In the latest results, which were published last week, the Fed revealed that, between 2010 and 2013, the disparity between the rich and the poor had widened.”

The source further explains how the dollar store fits in the new economy as follows.

“The ninety per cent may not have as much to spend, but they still have to eat, brush their teeth, and wash their clothes. It’s no wonder, then, that Dollar General and Dollar Tree, which sell household products at steep discounts, have been doing brisk business.”

There have been widespread concerns that dollar stores are creating unfair competition. Even worse is the accusation that the products the typical dollar store sells are actually inferior in quality. However, many dollar store products are the same brands sold at Walmart or Target. In addition, many dollar stores also replenish their stocks from the same sources that the big chain stores go to restock their own inventories.

It all boils down to this. By buying in bulk and selling at incredibly low prices, dollar stores can maintain a never ending cycle of purchases. Proof of this is that no one walks out of the dollar store without buying something, no matter how small in value.

Therein lies the big secret behind the 99 cents store, which in present times, has evolved into the modern day dollar store. In some areas, the dollar store is called a penny shop or anything that connotes deep discounts for items that consumers need in their day-to-day lives.

Not every country has the dollar for a currency, so across the globe, the “dollar store” has a different, localized name, yet the concept remains the same.

Lack of women on corporate boards becomes source of tension among shareholders – Dollarama joins this spotlight https://t.co/YlbSHyt3PY

— WXN (@WXN) June 14, 2016

Can you imagine how many (largely unaccounted for) lives may have been saved by the lowly dollar store? By stretching the purchasing power of a little bit of cash, countless trips to the food bank are being avoided. But, there are some issues regarding the toxicity of some items sold at dollar stores, as explained in a previously published Inquisitr story.

True, dollar stores aren’t perfect, but the fact that millennials are actually one of the biggest consumers of dollar store commodities is proof that there is huge faith in the concept. It might take some time to completely iron out the kinks in the system, but from the looks of it, consumers will keep on coming.

[Photo by Joe Raedle/Getty Images]