NPD: More Consumers Shopping Dollar Stores During Holidays

Dollar stores are seeing growth in shopper traffic during the holiday season with shoppers from higher income levels driving the growth, according to a recent survey from The NPD Group.

Overall, more than four in 10 consumers said they plan to shop a dollar store during the current holiday season. NPD’s Checkout, a receipt mining service, revealed that dollar stores are also gaining in popularity, with the number of shoppers to retailers such as Dollar General, Dollar Tree and Family Dollar increasing 3% in the 12 months ending October 2018.

“Dollar stores’ old bargain-based reputation is now more about value and variety, expanding their reach among consumers,” said Marshal Cohen, chief industry advisor, The NPD Group. “Especially during the holiday shopping season, time-starved consumers are attracted to one-stop retailers that help them minimize the surge in their spending.”

Over the past year the increase in brick-and-mortar dollar store buyers has been further bolstered by an increase in the average spend per buyer from $165 to $171, NPD said. Notably, consumers of all income levels and age brackets are shopping at dollar stores. Nearly a third of dollar store spending comes from households with incomes of $100,000 and higher.

The spending distribution among the four lower income brackets is fairly evenly distributed, with the second highest share coming from $25,000 to $49,999 income households. Older Gen Xers, between 45 and 54 years of age, are the primary dollar store buyer, representing 30% of spending.

Younger consumers are engaging with dollar stores as well. Shoppers ages 13 to 34 account for nearly one-third of the consumer dollars spent at dollar stores.

“The successes dollar stores are seeing at brick-and-mortar, and watching how it unfolds as the holiday season wraps up, will tell an important story about the state of retail,” said Cohen. “In a world where online continues to threaten the livelihood of physical stores, dollar stores are proving brick isn’t dead as long as it delivers the right balance of value to the consumer.”