The Battle of the Dollar Stores: How Dollar Tree, Dollar General and Five Below Are Faring This Holiday Season

The Battle of the Dollar Stores How Dollar Tree, Dollar General and Five Below Are Faring This Holiday Season

In this unprecedented holiday season, for consumers, it’s all about the Almighty Dollar — literally.

As the United States, and countries around the world, wade through the persistent coronavirus pandemic, consumers are grappling with the immediate health impact as well as broader financial implications related to job loss and macroeconomic shifts.

The result, experts say, is a more financially prudent shopper during retail’s critical season — a trend that could hurt some firms but is creating a boon to business for dollar stores.A report this week from market research firm indicates that Dollar General and Five Below, specifically, are defying pandemic-induced trends and are faring better year-over-year in terms of foot traffic. Dollar Tree, meanwhile, “is nearly there, but has a little ways to go,” noted Placer, adding that the holiday shopping season means “there’s good reason to think that these retailers will lead the charge and finish 2020 with a bang.” Dollar General, which had been faring well pre-COVID-19 — and even revealed mid-pandemic its plans to court higher-end shoppers by launching its Popshelf concept shops — is enjoying stellar traffic momentum in recent months, according to Placer. Visits in August, September, and October were up 13.6%, 2.2%, and 7.4% year over year, respectively. And so far this month, foot traffic is up 8.6% and 9.6% year-over-year during the first two weeks.

Meanwhile, Five Below has been mounting its comeback after it saw customer visits tank 93.4% year over year in April, when government orders forced so-called nonessential retailers to go dark. In October, its visits were up 9.9% — a sign that the company is in for a “monster holiday season,” said Placer. It, too, started the year strong before the pandemic took hold in the U.S., with store visits advancing 17.3% and 24.8% in January and February respectively.

For its part, Dollar Tree appears to be holding steady and is outperforming many of its retail peers on key metrics. According to Placer, its foot traffic was down 3.4% year-over-year — a far cry from the double-digit declines seen across retail — during October.

The low-price retail chain also reported reassuring earnings results on Tuesday: For the third quarter, Dollar Tree’s net sales increased 7.5% to $6.18 billion with overall same-store sales, including Family Dollar, up 5.1%. (Same-store sales for Family Dollar increased 6.4%. Dollar Tree same-store sales increased 4%.)

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