A teen retailer that sells everything for under $5 is becoming a huge threat to dollar stores

Five belowFive Below on Facebook.Five Below has a big expansion plan.

Five Below, a teen fashion chain where everything costs less than $US5, is becoming a huge threat to traditional dollar stores.

The chain has 366 locations, up from just 82 in 2008, according to a recent report by Morgan Stanley.

Sales have surpassed $US500 million.

The brand sells everything from tech accessories and sporting goods to party supplies and bedroom decor.

The average store is 7,500 square feet, about the size of a Gap store.

According to Morgan Stanley, the trendy brand is far more popular with teens than chains like Dollar General and Family Dollar.

While Five Below is much smaller than these chains, analysts at Credit Suisse believe it could eventually have 3,000 stores.

Capturing young people’s dollars is essential because they can grow up to be loyal, lucrative customers.

While traditional dollar stores have a frumpy image, Five Below is seen as trendy and exciting.

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