Two Photos That Show Why Dollar Stores Are Killing Discount Chains

Strapped for cash, consumers who once shopped at Wal-Mart and Kmart are turning to dollar stores.

But the shift to dollar stores is about more than price, Brian Sozzi, chief equities strategist at Belus Capital Advisors, told us.

While Wal-Mart and Kmart are cutting costs and trimming staff, chains like Family Dollar, Dollar General, and The Dollar Tree are investing heavily in making their stores appealing to customers.

As a result, dollar store stocks are outperforming discount chains’ shares.

Case in point: Dollar General’s new eye-catching coolers, in comparison to Kmart’s.

Here are the coolers at Dollar General. Note they are well-lit, with clear product labelling to entice the customer:

And here are Kmart’s coolers, which Sozzi notes appear outdated. Some of the lights are out, giving customers the illusion that food could be old or expired, he says:

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