Dollar Stores Success Likely to Continue

The trade-down shoppers express their loyalty to dollar stores.

CHESAPEAKE, Va. Dollar stores have thrived during the recession and analysts have projected another year of good holiday sales, the Wall Street Journal reports. Dollar General Corp., Dollar Tree and Family Dollar Stores should continue to see growth well into the new year, given the loyalty of its trade-down shoppers.

For the second year in a row, 95 percent of our trade-down customers are saying that, regardless of what happens to the economy, theyre going to continue to shop with us, said Rick Dreiling, CEO/chairman of Dollar General Corp.

Dollar store client pool also contains a big number of people who cant trade back up, with low-income customers shopping frequently at the stores. Among consumers surveyed SymphonyIRI, 18 percent of respondents said they would stop by dollar stores for food and beverages for holiday parties.

While the outlook for dollar stores could look less bright as the economy turns the corner, these chains are making plans to open hundreds of stores. Many stores have changed their product mixes and displays to cater to higher-income customers. National brands, along with snacks and cleaning supplies, have become more of a focus.

Core customers are stilling buying more needs than discretionary items. But with the economy turning, we expect to see that businesspicture frames, art objects, vasesgrow for us, as our customers begin to treat themselves again, said Don Hamblen, Family Dollar senior vice president of customer marketing.