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With inflation registering its highest percentage in decades in June, consumers are looking for any way they possibly can to stretch their money as prices continue to surge on basic necessities like food and fuel. As such, many have started flocking to cheaper alternatives when shopping—like dollar stores.
According to new data from Placer.ai, shopper foot traffic in dollar and discount stores rose 13.2% during the second quarter of 2022 compared to the previous three months, and it was up 8% year-over-year in the second quarter. It was also up 20.5% compared to the same time in 2019.
“The dramatic rise in Yo3Y weekly visits reveals the long-term advantage the pandemic gave the category. In the early days of COVID, dollar and discount stores were one of the few retail categories that remained open as essential businesses, which led many shoppers to discover the value priced one-stop-shops—and these shoppers have been coming back ever since,” the report stated.
In terms of specific companies, Family Dollar saw foot traffic rise the most, at 16.3% year-over-year in Q2. Five Below saw an increase of 10.2%, Dollar General was up 8.5% and Dollar Tree traffic rose 5.9%.
The shift in consumer spending habits came as even the dollar store model was forced to adjust to inflation. Dollar Tree announced in 2021 that it was being forced to raise the price of nearly all of its items to $1.25 each, and would be retaining that price point going forward, even if inflation eased.
Shoppers are well served by a number of stores all across the United States as well. Dollar General has more than 17,000 locations across the United States, while Family Dollar and Dollar Tree, which are part of the same family, operate more than 15,000 stores. Five Below, which was founded in 2002, continues to expand, but currently operates approximately 1,200 stores. They announced plans in June to open an additional 1,000 stores by 2025.
Photo: Reuters / ERIN SCOTT
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