- Dollar stores are having a moment. Dollar-store sales in the United States grew from $US30.4 billion in 2010 to $US45.3 billion in 2015.
- Dollar Tree currently has 14,000 locations, with plans to open hundreds more in 2018. Comparable sales were up 1.8% at Dollar Tree in the second quarter.
- While not a traditional dollar store in that its products are priced up to $US5, Five Below currently has 625 stores, and it plans to open 50 more this quarter alone. In the second quarter of 2018, Five Below’s comparable sales grew by 2.7%.
- We shopped at Dollar Tree and Five Below and found that Five Below offered a superior shopping experience.
Dollar stores have been growing like crazy over the past few years.
From 2010 to 2015, dollar-store sales grew from $US30.4 billion to $US45.3 billion in the United States. Dollar General, Dollar Tree, and Family Dollar have all announced plans to open hundreds of stores this year.
Dollar Tree, which recently acquired the Family Dollar chain, currently has around 14,000 locations. In the second quarter of 2018, Dollar Tree reported comparable sales were up 1.8%. USA Today reported that Dollar Tree plans to open 350 more namesake locations, 300 new Family Dollar locations, and rebrand 50 Family Dollar locations as Dollar Tree stores.
While not a traditional dollar store in that its products are priced up to $US5, Five Below announced its own plans to grow earlier this year. In the second quarter of 2018, Five Below’s comparable sales grew by 2.7%. It has opened 67 new stores so far in 2018 and plans to open another 50 this quarter in addition to the 625 stores it already operates, CEO Joel Anderson said in an earnings call last week.
One of those stores will be a flagship location on New York’s Fifth Avenue, one of the most expensive shopping destinations in the US, CNBC reported.
We compared what it’s like to shop at the two rapidly growing dollar stores and found that one offered a far better experience. Here’s the verdict:
I went to a Five Below store in Queens, New York.
Even though everything in the store already cost $US5 or less, many products were 50% off.
The store was bright and spacious. Loud pop music was blasting over the speakers, and there were a lot of families shopping around.
Near the front of the store were wheelbarrows filled with school supplies like pens and pencils, all for $US5 of less. The same products typically cost $US8-10 at stores like Staples or Target.
The store also sold backpacks, notebooks, binders, and other school supplies for under $US5.
Five Below carried electronics like headphones and phone chargers from recognisable brands like Maxwell.
There was a wall of $US5 clothes and shoes, selling simple styles like black boots, plain tank tops, and pajamas that you might also find at a store like Target. The styles were all very basic, and the quality was better than you’d expect on a $US5 pair of shoes.
It carried a lot of makeup and beauty products, including drugstore brands and a huge selection of cleansers, makeup removers, soaps, and bath products, in addition to makeup and nail polish. There was a surprising amount of all-natural and cruelty-free brands, which are typically more expensive.
There were books for $US5 or less in the center of the store, including children’s books, activity books, and novels by authors like Stephen King.
It had room decor like Himalayan salt lamps, essential-oil diffusers, and zen gardens, which can typically cost $US20 or more at other stores.
The store had an entire wall of storage bins, pillows, blankets, and rugs. The quality was surprisingly great for how cheap it all was.
There was a small crafts section selling products like Play-Doh and acrylic paint for $US1, and most of it was 50% off.
The back of the store was packed with toys and games …
… fitness equipment …
… and sporting equipment.
The front of the store was like a small candy store.
Five Below offered a little bit of everything for under $US5. The quality was decent, and there was a big variety of products, many of which were from recognisable brands. It was also very bright and clean, and it was packed with shoppers when we visited.
Dollar Tree was the next store we visited, also in Queens. Signs advertised that everything cost $US1.
The entryway of the store was filled with seasonal products, and the store was packed.
The store carried a lot of products that were similar to what we found at Five Below, like school supplies and backpacks.
But much of the store was a complete mess.
There were plenty of electronics like phone chargers and headphones, and everything cost $US1.
There were basic clothing items like socks and plain T-shirts, but it was hard to shop in this particular aisle because it was so messy.
There were buckets scattered throughout the aisles because the roof was leaking.
There was equally as much makeup at Dollar Tree as at Five Below, but the brands weren’t recognisable, and it had less to offer in terms of natural and cruelty-free products.
Dollar Tree had a small section with books, but it was pretty messy like the rest of the store.
There were toys and games, but there wasn’t as big of a variety as at Five Below, and the section was a mess. There were plush toys thrown on the floor and pages torn out of colouring books.
One of the biggest differences between the stores was that Dollar Tree sold food in place of home decor products. It carried canned goods, frozen meals, baking supplies …
… and plenty of snacks and candy.
Even though Dollar Tree had the advantage of selling food …
… the store was dark, messy, and cramped to shop in.
Five Below didn’t sell food, but the products were, at most, $US4 more expensive than at Dollar Tree, and the quality was better. Plus, the store itself was much cleaner, brighter, and more pleasant to shop in. Five Below was the winner for those reasons.
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