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Dollar stores have become way too prevalent in recent times. As of 2021, Dollar stores have surpassed 35,000 in number across the United States, experiencing an increase of around 5,000 since 2017. Retailers or companies like Dollar Tree are among the top retailers in the U.S.
Several companies like Dollar Tree have emerged in recent times. Some of them are Dollar General, Family Dollar, Five Below, Big Lots, Aldi, and the dollar store sections of Walmart and Target.
A dollar store sells every item for a dollar or less. The dollar stores market was estimated to generate a revenue of 101.3 billion U.S. dollars in 2022. The post-COVID world and high inflation rates have made dollar stores affordable and widespread.
Dollar Tree is the leading dollar store retailer in the nation. Let us look at other companies like Dollar Tree that are worth your visit.
Table of Contents
The Dollar Tree: Company’s History
Dollar Tree had its roots in 1953 when K.R. Perry opened a Ben Franklin variety store, which he later renamed K&K 5&10. The K&K 5&10 store transformed into K&K Toys.
Macon Brock, Doug Perry, and Ray Compton started 5 $1 stores, and these dollar stores continued alongside K&K stores. In the 1990s, K&K Toys sold to K.B. Toys and renamed dollar stores Dollar Tree stores, leading to an expansion of almost 5000+ stores: business model and strategy.
Dollar Tree’s primary strategy was to move its stores from expensive mall areas to affordable, low-rent areas. They source their products directly from manufacturers, take up the excess stock produced by brands, and maintain a simple store layout to maintain effective cost control. It allows them to source such a wide range of products at such a low cost.
Dollar Tree offers a wide range of products ranging from home, kitchen, and cleaning supplies to health and beauty supplies, art and crafts supplies, party supplies, and food and snacks to car parts supplies. They also sell occasional gifts, seasonal fruits, food, and other essential household items.
Dollar Tree’s revenue has constantly increased since the beginning, with ever-increasing profit margins. However, the annual income has been relatively low post-COVID. For example, Dollar Tree’s annual gross profit for 2022 was $7.737 billion, a 0.65% decline from 2021.
You can find your nearest Dollar Tree store through this link.
7 Top Companies Similar to Dollar Tree
Another one on the list of companies like Dollar Tree is Dollar General.
The Company had its roots in the late 1930s when J. L. Turner and his son Cal Turner bought bankrupt retail stores during the Great Depression to liquidate them.
The first Dollar General store considered the first Dollar store in history, was established in 1955 by Cal Turner, who proposed selling all items for $1.
Business model and strategy
The Company’s primary strategy is establishing stores in rural and suburban areas that need access to large retail stores.
It also helped them gain loyal customers and provide a wide range of products at a meager cost.
Dollar General offers a wide range of products like cooking and cleaning supplies, home and electronic appliances, pet supplies, art and craft supplies, etc.
The Company has shown a continuous increase in its revenue, and it has maintained a constant profit margin of more than 10%.
The Company reported a net income of $2.4 billion for fiscal year 2022, an increase of 0.7% compared to $2.4 billion in fiscal year 2021.
Another one on the list of companies like Dollar Tree is the Family Dollar.
The Company was founded by Leon Levine when he wanted to provide his customers with high-quality products under $2. He opened the first Family Dollar Store, and it expanded to its 200th store, being opened by 1971.
As of 2015, Family Dollar sold its ownership to Dollar Tree Inc. Dollar Tree paid $8.5 billion to take up Family Dollar’s ownership.
Business model and strategy
Family Dollar applies a similar business strategy to Dollar General’s; its stores are in rural and suburban locations.
Further, another business strategy that Family Dollar uses is its standardized store layout. Family Dollar follows a particular store layout across all its stores. It helps to ensure a convenient customer shopping experience and assists in stocking up on products.
Family Dollar offers a wide range of high-quality products at a low price.
They have household supplies, paper products, food, health and beauty, hardware and automobile parts, art and craft supplies, pet supplies, housewares, home decor products, clothing, toys, and electronics.
The Company’s sales skyrocketed until 2014 when it peaked at $10.4 billion. After that, the profit margin decreased, and the Company’s ownership was up for bidding.
Dollar Tree Inc. acquired its ownership in 2015. Since then, its financial performance has been almost synonymous with the parent company’s economic performance.
Comparison of Dollar Tree, Dollar General, and Family Dollar
Dollar Tree prices most of its products below $1. Whereas Dollar General and Family Dollar price most of their products under $10.
These two stores even have products ranging from $10-$25, where they place home decor and electronic items.
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Store locations and size
Dollar General stores are primarily located in rural and suburban areas, while Family Dollar stores are in urban and suburban areas. On the other hand, Dollar Tree stores are also in urban areas.
The number of stores of Dollar General surpassed the number of Family Dollar and Dollar Tree stores combined in the late 2000s. Currently, Dollar General has 17000+ stores as of 2021 stats, and Dollar Tree and Family Dollar have a total of 15000+ stores combined.
The average store area of Dollar General stores is also more significant than the middle store area of Family Dollar and Dollar Tree stores.
Product offerings and brand names
All three brands provide a wide range of products at meager prices. Of the three, Dollar General has established a better brand name than the other two.
Dollar Tree and Family Dollar have needed help in keeping up with their names after the acquisition of Family Dollar.
All three brands focus on budget-conscious customers. They aim to provide low-income customers with quality products. Dollar Tree and Family Dollar focus on customers living in urban and suburban areas. Dollar General focuses on customers in rural areas.
All three have a loyal customer base and provide excellent customer support and service.
Financial performance and market share
Dollar General holds the highest market shares as of the stats of 2022. However, the average transaction values of Dollar Tree and Family Dollar have risen in 2022.
All three have seen a rise in consumer sales post-COVID as the economic crisis led people to budget-conscious dollar stores.
Other Competitors in the Dollar Store Industry
Five Below is yet another one on the list of companies like Dollar Tree. It is an American chain of stores that sells most of its products under $5, and its product range also has a small section ranging from $6 to $25. Its target audience is teens and pre-teens, and they sell clothing, electronics, toys, beauty products, etc.
The store classifies its items according to sections and provides a range of products at a low price point, ensuring customer loyalty.
Ollie’s Bargain Outlet
Ollie’s Bargain Outlet is another one of the companies like Dollar Tree. It is a chain of discount retail stores that aims at providing high-quality products at heavily discounted prices.
Ollie’s most excellent strategy is its low-cost store structure. Its stores are in unpopular places with low rent. Stores only spend a little on interior decoration, and they save this money and outsource products directly from manufacturers and excess stocks.
Thus Ollie’s manages to gain a profit while providing heavy discounts.
Big Lots is yet another American chain of retail stores. Further, Big Lots focus only on home decor and furniture supplies, and Big Lots provides a wide range of discounts for quality products.
The best part about this brand is that it uses a portion of its profits to save the environment, take up initiatives to reduce waste, and partner with NGOs.
Unlike all the others, Aldi is a German family-owned supermarket retail store chain. The brand Aldi offers a limited selection of high-quality, private-label products at a low price point. Another unique feature is that Aldi makes customers get their bags to reduce waste.
Aldi makes great efforts to maintain sustainability, reduce waste while providing high-quality products at low prices.
Walmart and Target’s Dollar Store Sections
Due to the increasing popularity of dollar stores, popular retail stores like Walmart and Target have introduced dollar store sections. It provides customers with products at a lower price.
These products range from household supplies to art and craft, cleaning, pet, etc. Mainly these sections are offering products in small quantities in these sections. Usually located at the front of the retail stores, these sections provide affordable items to customers.
See also: 7 Best Stores Like Target And Walmart
Future Outlook of the Dollar Store Industry
Dollar stores are growing in number. But, recent trends have shown an increase in online shopping customers. Dollar stores are changing with the trends and are investing in e-commerce platforms to expand their range audience.
Many are collaborating with good delivery companies to provide fast and safe delivery.
Impact of economic trends and consumer behavior
Poor economic conditions make dollar stores function better as consumers value reasonable prices over high-end brands and products.
Consumer behavior has also led to a change in the trends of dollar stores.
Threats from online retail giants
Dollar stores face a massive threat from online retail giants like Amazon as people in this post-COVID era prefer online shopping to retail stores.
Online retail giants are developing a better and broader range of products with minimal or no delivery charges. It has made shopping earlier for customers as the delivery is quick and reliable at great prices.
These retail sites target customers with personalized recommendations because of their well-developed data analytics and marketing. It has further increased the number of online shopping customers. Thus, dollar stores are facing a threat.
Who is Dollar Tree's biggest competitor?
Dollar Tree’s biggest competitor is Dollar General. Further, retail stores like Walmart and Target are also its big competitors.
What is the most successful dollar store?
Dollar General is the most successful dollar store with an ever-increasing number of stores, customer base, and profit margins.
What company merged with Dollar Tree?
Family Dollar merged with Dollar Tree. Dollar Tree tools its acquisition in 2015 with a bid of $8.5 billion.
When was the first dollar store opened?
The first Dollar store is considered to be the first Dollar General store. It was opened in 1955.
Thus, dollar stores provide consumers with great-value products at low prices. It is helping low-income customers and people under economic stress to buy high-quality products.
These dollar stores are sourcing products directly from manufacturers, excess stocks, and leftover stocks from retail stores that help them sell products at low prices. They also follow various methods like renting out low-cost places for their stores to increase profit margins.
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