How The Dollar Store Boom May Shake Up Big Grocers

The success of dollar stores has been one element of the recent discount boom in U.S. retail. Is their growth a threat to the core grocery category? If you’re a big, established grocery store, the answer may be ‘yes.’ After crunching the numbers on the biggest dollar stores,  our figures show that the dollar store segment remains niche. But, coupled with grocery discounters and Internet-only retailers, dollar stores threaten to splinter spend away from the biggest players in the grocery space.

Here’s our thinking, based on a look at the four biggest dollar store chains, in order of decreasing sales: Dollar General DG -1.16%, Dollar Tree DLTR -2.34%, Family Dollar (acquired by Dollar Tree in 2015) and 99 Cents Only Stores. The 2015 data below includes some estimates, including estimates from partial-year data for Family Dollar and 99 Cents Only.

Swift Growth: Dollar-Store Sales Leap to $42 Billion

Dollar stores have grown sales fast. From 2010 through 2015, the top four chains grew their combined total annual sales from $28 billion to an estimated $42 billion, representing a compound annual growth rate (CAGR) of 8.5%.

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