Thanks for Visiting!

Register for free to get the full story.

Sign Up
Already have a Placer.ai account? Log In

Dollar Stores - Who Could Outperform?

By 
Tali Rozenman
April 23, 2020
Dollar Stores - Who Could Outperform?
SHARE
Explore our free tools to get timely insights into key industries
Check out the latest trends for
No items found.
Key Takeaways

The coronavirus has certainly impacted all sectors of retail, some more deeply than others. But perhaps even more important than the short term impact is how well-positioned different sectors are for the day after. So we’ve been analyzing sectors like grocery, QSR and fitness to break down their current performance and post-coronavirus potential. 

This time, we dove into the dollar store category to see how it has been affected, and what its pre-pandemic performance indicates about the potential for a resurgence. 

Relative Strength Amid the Virus 

When looking at the nationwide performance of five major dollar store chains during the weeks affected by the coronavirus, we see some interesting results. Big Lots, Dollar Tree and 99 Cents Only experienced visit trends, on par with major retailers’ nationwide trends - a sign of strength in and of itself considering the strength of the grocery sector. Impressively, Family Dollar only saw a 6.6% year-over-year decline in the final week of March and returned to positive year-over-year growth of 1.2% in the second week of April. 

Even more surprising was Dollar General, which saw major year-over-year growth for the entire period. While Dollar General has certainly seen a boost from a location expansion perspective, the growth is still a significant barometer of its current performance and future potential. While the others all saw declines the last week of March and the first week of April, the brand experienced increases of 15.1% and 25.6% in weekly visits respectively. This indicates the major potential for Dollar General not only to come out of this crisis unscathed but to establish itself as the strongest competitor for these other chains. 

With a period of economic uncertainty a seeming inevitability, the clear orientation towards value could benefit this category. But even among the group, the first step to understanding the potential is looking at those already experiencing growth.

Positioning Among the Pack

Looking at year-over-year growth for the months of July 2019 through February 2020, there is great reason for optimism. Except for Big Lots, and a slight December dip for 99 Cents Only, all chains experienced impressive year-over-year growth. Even though most chains saw a seasonal dip during the month of January, all of them still show year-over-year growth during their weakest month, followed by a very strong February. 

In this strong performing group, one brand in particular stands out. Dollar General, once again, soars above its competitors for seven of the eight months, falling slightly behind Family Dollar in September. Big Lots, on the other hand,  lags behind with four months of traffic declines year over year, taking an especially significant hit during the holidays with a 5.3% year-over-year decrease in December traffic. And diving deeper into each brand’s performance helps explain why. 

Big Loss for Big Lots?

Looking at the period of January 2019 up to the third week of February 2020, other than a holiday peak in November and December, Big Lots shows a relatively flat trend. As mentioned, the peak itself is still lower than the previous year’s. 

For a store that so heavily relies on holiday traffic, the pandemic could be a dangerous blow -  especially if the COVID-19 effect lasts through the calendar year - making a bounceback far more difficult. Tapping into opportunities to attract traffic outside the holiday season could be key to sustaining this chain. 

Value of Loyalty

When it comes to customer loyalty, the number of visits per customer for a certain period of time can indicate a deeper relationship with the brand and its long term potential. 

Interestingly, while 99 Cents Only only starts to show positive baseline growth in September 2019, it has the highest customer loyalty of the group, with 5.6 visits per customer on average for the period. Unlike Dollar Tree, Dollar General, and Family Dollar, 99 Cents Only does not experience a major dip during the month of January, with traffic staying slightly low but steady into February. From the end of July, there is a steady upward trend, indicating this brand’s strength and potential to quickly bounce back in the coming months. 

In terms of customer loyalty, unsurprisingly, Dollar General comes in a close second with 5.4 visits per customer on average for the interval. The chain shows positive baseline growth for the majority of the period, positioning it as the strongest contender in the bunch. Additionally, its January low of weekly visits at 12.5% above the baseline, is much less serious than Dollar Tree’s 19.4% or Family Dollar’s 15.7% mark. This demonstrates Dollar General’s ability to maintain steady baseline growth, and avoid the same magnitude of seasonal dips.

Takeaways 

While it’s difficult to predict the post-pandemic outcome of any sector, dollar stores seem ideally positioned because of their value orientation. Dollar Tree, while historically one of the strongest in the group, has been one of the hardest hit by the pandemic. Meanwhile, Dollar General and Family Dollar came into the outbreak in a strong position, and have managed to continue bringing in positive traffic amidst this uncertain time. The ability to minimize seasonal dips, and to resume a positive growth trend will ultimately be key to not only come out of this crisis on steady ground, but to continue thriving. 


For continued coverage on the COVID-19 outbreak and its implications, check back in at the Placer.ai blog.

Learn how downtown regions across US cities are measuring up with our free tools.
Check out the latest trends for
No items found.

Related Topics

Explore our free tools to get timely insights into key industries
Check out the latest trends for
No items found.
SHARE
Get 3 brand & industry
breakdowns every week
Subscribe to the newsletter
Oops! Something went wrong while submitting the form.

Get a Demo

Please enter your first name
Please enter your last name
Please provide a valid email
Please enter your email
Please enter company name

Thanks for reaching out!

One of our experts will be in touch soon

Try Placer.ai Free
Oops! Something went wrong while submitting the form.

Recent Publications

Get 3 brand & industry breakdowns every week

Subscribe to the newsletter
Five Below and Ollie’s Bargain Outlet: A Pre-Holiday Snapshot
Kroger: Getting into The Seasonal Swing 
Avison Young Launches Office Busyness Index Powered by Placer.ai to Provide Unmatched Insights on Office Utilization Across Major U.S. Markets
Off-Price Ahead of the 2024 Holiday Season
A Beautiful Season Ahead: Ulta and Sally Beauty Supply
Sportswear Ahead of the 2024 Holiday Season 
Placer 100 Index: October 2024 Recap 
Placer.ai Office Index: October 2024 Recap
Placer.ai Mall Index: October 2024 Recap 
Halloween’s 2024 Retail & Dining Impact – Party City Carries the Season
Checking in With Department Stores: Nordstrom and Macy’s
Superstores and Wholesale Clubs Ahead of the Holidays
Home Depot and Lowe’s Heading Into the Holidays
Starbucks and Dutch Bros: Short Visits Lead the Way
Planet Fitness: Raising the Bar(bell)
Checking in With Full-Service Restaurants: First Watch, Chili’s, and Outback Steakhouse
RBI and Yum!: QSR Resilience in 2024
Boot Barn and DSW: Stepping Up Their Game
Target’s October Circle Week: A Data-Driven Snapshot
Chipotle, Shake Shack & Wingstop: Dining Success in Q3 2024
Playa Bowls and Tropical Smoothie Cafe: Berry Big Business
Cheesecake Factory & BJ’s Restaurants: Full-Service Success
Checking in on McDonald's and Wendy's 
Sprouts Farmers Market: A Specialty Grocer With a Traditional Twist
CAVA: The Craze Continues
Placer.ai Reaches $100M Annual Recurring Revenue
Catching Up With Carter's 
A Texas Roadhouse and LongHorn Steakhouse Showdown
Placer.ai Mall Index: September 2024 Recap – Labor Day Peaks and Holiday Season Predictions
Albertsons Q3 Check-In
Looking Ahead to the 2024 Holiday Season
Trader Joe's: Continuing to Thrive in 2024
Bowlero and AMF: A Ten-Pin Knockout
Recreational Retail: Store Performance in 2024
Placer.ai White Paper Recap – September 2024
A QSR and Fast-Casual Face-Off
Sam’s Club’s In-Store Retail Media Network Opportunity
The Rising Stars: Six Metro Areas Welcoming Young Professionals
Costco in 2024: A Deep Dive
Sherwin-Williams in 2024: Brighter Than a New Lick of Paint
Life Time and Orangetheory: Premium Fitness Flourishing
C-Stores: More Than A Pit Stop
Darden: Dining Dominance Undeterred 
Placer 100 Index for Retail and Dining: August 2024 Recap
Placer.ai Office Index: August 2024 Recap
Placer.ai Mall Index: August 2024 Recap – Back-To-School In Full Swing
Auto Parts Retailers: The Traffic Continues
Pumpkin Spice Works its Magic Once Again
School Season Sparks Retail Growth
Placer.ai White Paper Recap – July & August 2024
Big Lots’ Big Rightsizing Move in Four Data Points
Fun Away From The Sun: Checking in With Eatertainment
Domestic Migration and Population Growth: Strong Currents Off The Carolina Coast
The Civic Impact of Summer Events
Retail Trends in College Towns: A Back-to-School Snapshot
Five Below and Ollie’s Bargain Outlet: Consumers Still on the Hunt for Discounts
Macy’s & Bloomingdale’s: Into 2024 and Beyond
Limited Time Only: The Trend Continues
Beauty in 2024: Many Ways to Win
Dollar General & Dollar Tree: Powering Ahead in Q2 2024
The Home Depot and Lowe's Foot Traffic Remodel in Q2 2024
Superstore Update: Summer Savings Spree
Placer.ai Mall Index: July 2024 Recap – From Fourth of July to Back-to-School
Placer.ai Office Index: July 2024 Recap
Summer Movie Madness: Blockbuster Films Boost Foot Traffic
Driving Success: Toyota in 2024
Denny’s and IHOP: An All-Day Breakfast Matchup
Warby Parker: Seeing Clearly Now
Planet Fitness at the 2024 Halfway Point
Serving Summer 2024: RBI and Yum! Brands Q2 Foot Traffic
Starbucks, Dutch Bros., Dunkin’: Finding Summer Success
Fast Food and Fast Casual Favorites, Plus CosMc’s Takeoff
Chipotle and Sweetgreen: Fast-Casual in Q2 2024
First Watch, Texas Roadhouse, and Applebee’s: An FSR Roundup
Albertsons Companies: H1 2024 Recap
Teaming Up For Success: Sports Stadium Sponsorships
Limited Time Offers: Price Wars Boost Visits
Placer 100 Index for Retail & Dining: June 2024 Recap
Placer.ai Mall Index: June 2024 Recap
Placer.ai Office Index: June 2024 Recap
Inside Out 2: The New Blockbuster Bringing Crowds Back to Theaters
Petco and PetSmart: A Head to Head
Frozen Delights: Exploring Ice Cream Chains Across America
Placer.ai White Paper Recap – June 2024
Barnes & Noble: Writing a New Story
Small Format Stores - Sprouting, Blooming, and Expanding
Retail and Dining on Father’s Day
Thrift Store Visit Scores
Charting Value Grocery’s Visit Growth
Placer 100 Index for Retail & Dining: Introduction and May 2024 Recap
Digging Into Darden: Q2 2024 Update
2024 Retail and Dining Trends Update
TRU and avid: Midscale Hotels on the Rise 
Diving Into Kroger: A Strong Start to 2024
Placer.ai Mall Index: May 2024 Recap – Mall Visits on the Rebound
Placer.ai Office Index: May 2024 Recap
2024 Memorial Day Recap
Las Vegas: A Tourism and Migration Deep Dive
Eatertainment Chains: Full on Food, Fun, and Foot Traffic
The Promise of Luxury Apparel