Dollar Stores’ Slow Sales Aren’t Cramping Expansion Plans

The two biggest dollar store chains in the United States plan to open hundreds of locations despite cooling sales.

Dollar Tree and Dollar General aim to open more than 1,300 new stores during this fiscal year, The Wall Street Journal reported Wednesday (Sept. 18).

While that figure is down from last year — and comes as Dollar Tree is closing many of its Family Dollar locations — it’s ahead of other retailers’ expansion plans, illustrating the chain’s belief that new stores can help boost sales and market share, according to the report.

Dollar stores are wrestling with a decline in spending, increased competition from other discounters, and a “strategic disadvantage when it comes to eCommerce,” with companies like Target and Walmart investing in omnichannel shopping integrations, the report said.

“Dollars always had this large niche in retail because it was the combination of value and convenience,” said Peter Keith, a senior analyst for Piper Sandler, per the report.

Now, Keith added, especially for middle- and upper-income consumers, “the shift toward this digital shopping has become the new convenience play.”

Dollar General management said last month that the company is employing a mix of digital tools and in-store experiences to boost sales.

“We have increased the employee presence at the front end of our stores, with our associates committed to providing [a] friendly, welcome and elevated level of engagement to our customers while also facilitating the positive checkout experience,” CEO Todd Vasos said during an earnings call.

Dollar Tree, meanwhile, announced this month its new multi-price format, designed to diversify the product range with items priced between $1.50 and $7. The goal is not to raise prices on existing products but to introduce new items at higher prices to improve the shopping experience and attract more customers.

This week saw the release of the latest retail sales figures from the U.S. Census Bureau, which showed that while consumers were still spending in August, the pace slowed. Overall retail sales were up 0.1% month over month, with non-store retail sales — typically seen as a proxy for eCommerce — climbing 1.4%.