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These days, everyone is a value shopper.As a result, dollar stores have grown into a $56 billion industry, a 43 per cent increase since 1998, according to the industry research firm IBISWorld (via The Star Tribune).
To put that in perspective, just look at this December Colliers International report, which found that with 21,500 locations, four national dollar store chain locations are outnumbering the biggest drugstore chains in the U.S.
So what’s the deal?
For one thing, negative stereotypes around the industry are quickly shattering.
“The biggest misconception about dollar stores is that they only have junk that no one needs and everything is low quality,” Andrew Schrage, founder of MoneyCrashers, recently told Your Money.
Shoppers have discovered they can score great deals on some of life’s simpler necessities: cleaning supplies, cookware, fun party items, and even pet toys.
But it’s not just that these budget shops are simply cheaper.
The items are better quality, too. New York Times’ Jesse McKinley, who wrote about his experience decorating various rooms of his apartment with dollar store purchases, noted that many of the items are now made with real glass, stainless steel, ceramics, and fabric – not just the low-quality stuff.
Plus, the stores look more appealing.
They’re cleaner, brighter, and have since planted themselves in upscale areas, widening their customer base and increasing their accessibility to neighborhoods that may have previously shunned them.
But perhaps the real allure lies in the overall convenience factor. John Tomlinson, an analyst at ITG Investment Research told SmartMoney the proximity to people’s homes and their smaller sizes (relative to big-box retailers like Walmart) allow for quick, cheap, satisfying consumer experiences.
The dollar stores have also considered their customers in the digital age — those who may just prefer to purchase their dollar items with the click of a mouse.
Dollar General, whose more than 9,800 locations in 38 states make it the largest retailer in the country, includes a category for nearly every commercial need on its website. Office & school supplies, household items, food, cosmetics, apparel, toys — you name it, it’s there.
The site also offers coupons for additional discounts and includes interactive components, like the opportunity to win trips to the Super Bowl by entering a sweepstakes.
Headed to a dollar store soon? Read on how to tell the deals from the duds >