"Middle-class customers like the hunt for bargains," says John Strong, a business and economics professor at the College of William & Mary. "Be it at Dollar Tree or at T.J.Maxx."
Dollar stores particularly, including chains like Dollar General and Dollar Tree, have won over American consumers, especially over the past decade. That's mostly because these stores are cheap and convenient, experts say, and they set up shop where other retailers can't or won't.
Indeed, now, "more than half of the U.S. population lives within a five-minute drive of a Dollar General," according to Julia McCarthy, director of the Food-Ed Hub at Columbia University's Tisch Food Center. And shoppers have bountiful options: An analysis written by Strong says that the average dollar store has more than 10,000 products on the shelf.
Still, those low prices and the convenience of dollar stores can come at a not-too-obvious cost for some consumers.
The quality of the products at some dollar stores can be questionable. Earlier this year, New York's attorney general fined both Dollar General and Dollar Tree for selling expired medications. Consumers have also filed class-action lawsuits against dollar stores for selling motor oil that can cause engine damage.
Given the billions of dollars' worth of products sold at dollar stores over the years, these instances have been relatively rare. The companies themselves say they're dedicated to ensuring the products they sell are safe. "We are extremely committed to product quality, safety, and customer satisfaction," a spokesperson for Dollar Tree tells Grow.
Keep in mind that many of the inexpensive items found in dollar stores are cheap for a reason. The products don't tend to be durable and are designed to have short life spans, so you'll likely find yourself back at the store buying a replacement before long.
And some studies say dollar store chains' strategy of saturating certain areas tends to hurt small, local businesses.
Going forward, there's also the chance that prices, at least at some chains, could go up. Dollar stores, like other retailers, are under pressure to keep growing, both in terms of revenues and in market share. That's leading to consolidation and, for consumers, price increases.
Some products at Dollar General already sell for more than $1, and many for between $5 and $10. And while Dollar Tree still prices everything at $1, it's experimenting with a "Dollar Tree Plus!" initiative in some stores, offering products at higher price ranges.
Recently, Dollar General has even shifted its strategy to cater to wealthier shoppers in order to attract more customers by adding more home goods to its stores and, in some areas, fresh produce. The company has said it's also trying to get existing customers to spend more by fiddling with in-store displays and by lowering shelves to make it easier to find products.
These strategies appear to be paying off. In 2018 alone, customer spending rose 7% at dollar stores, according to a report from market research firm NPD Group.
Here are a few ways that you can find savings as a budget-conscious consumer besides dollar stores:
- Join a warehouse club. If you have time and transportation, you can plan a weekly or monthly trip to a warehouse club like Costco or Sam's Club. Shoppers can often find considerable bargains at warehouse retailers, and memberships often come with a slew of other perks, including discounts on prescription medications and automotive repairs. Getting to the store may require a longer drive, depending on where you live, but the savings, services, and higher quality products may be worth the trip.
Video by Courtney Stith
- Buy in bulk. You can save money by making your purchases in bulk at bigger retailers, including warehouse clubs or big-box retailers, or online. Many of the same products that shoppers look for at dollar stores — including consumables like toothpaste, garbage bags, and diapers — can be found for less if you buy in large quantities.
- Use a grocery delivery service. There are numerous choices out there for grocery delivery, including Amazon and Instacart. Many grocery store chains also offer customers delivery, though sometimes for a small fee. Big box stores like Walmart and Target have started delivery services of their own to compete with Amazon, and in time, that may filter down to dollar stores.
- Do it yourself. If you're a DIYer, you can save a lot of money by creating a version of the products you need. For example, the average household spends $184 annually on cleaning supplies but, with a handful of basic ingredients, you can make your own — and save a lot of money.
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