Between 2000 and 2005, the dollar store channel grew by $12.2 billion, or 59% ($9.5 billion, or 40% at constant prices.) This remarkable growth--an average of 11.8 % over the period--can be attributed to a number of factors, including the legitimization of the dollar store channel, consolidation in the space, and a record numbers of new store openings. With more appealing store layouts and improved product quality, the reputation of the dollar store has improved, attracting a greater proportion of middle- and high-income “treasure hunters.”

Between 2000 and 2005, the dollar store channel grew by $12.2 billion, or 59% ($9.5 billion, or 40% at constant prices.) This remarkable growth--an average of 11.8 % over the period--can be attributed to a number of factors, including the legitimization of the dollar store channel, consolidation in the space, and a record numbers of new store openings. With more appealing store layouts and improved product quality, the reputation of the dollar store has improved, attracting a greater proportion of middle- and high-income “treasure hunters.”

Massive dollar store expansion has been partially responsible for growing consumer appreciation of the channel, and has enabled large chains to realize economies of scale. However, as store openings slow, the major dollar store retail brands will face an inevitable decline.

In this report, Mintel clearly identifies the principal external factors driving or curtailing growth. Exclusive consumer research reveals the attitudes, needs and behavior of consumers, with analysis broken down both by demographic characteristics, and by store type. Six years of specific sales data provide a factual and impartial presentation of the market as a whole. Using the SPSS forecasting package, Mintel provides a five-year forecast of U.S. retail sales, revealing potential opportunities for growth and product development.

For the purposes of this report, dollar stores consist of:

extreme value retailers (Family Dollar, Dollar General)

closeout stores (Big Lots, Odd Jobs)

single-price stores (Dollar Tree, 99 Cents Only)

Extreme value retailers sell deeply discounted merchandise, typically ranging in price from $1 to $20.

Closeout stores such as Big Lots offer a wide variety of merchandise, typically at 20-40% off of standard retail prices. These types of stores generally tend to carry more substantial or expensive items such as furniture, home furnishings, and seasonal merchandise.

Single-price stores such as 99 Cents Only Stores and Dollar Tree sell merchandise only for the price advertised in the store’s name (i.e., 99 cents, or $1). These retailers sell a wide selection of often name-brand closeout and regularly available consumable products, including food, household supplies, and health and beauty care.