Why Online Shopping Could Be a Way Forward for Dollar Stores

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After holding strong post-pandemic and establishing themselves as a key player in the grocery industry, recent reports reveal that dollar stores are facing slowing sales and worse-than-expected earnings. This decline is driven by weaker spending among their low-income customers and increased competition from big-box retailers like Walmart and Target, which have made shopping more convenient with their online and delivery offerings – with convenience being a key advantage dollar stores once held. Despite these challenges, Dollar General and Dollar Tree plan to open a combined total of over 1,000 stores this fiscal year, signaling confidence in their long-term strategy. 

CivicScience took a closer look at where dollar stores stand today with our InsightStore database of over 5 billion consumer responses. Here’s what the data say:

1. Despite reported slowing sales, the percentage who shop at dollar stores in general has risen over the last two years. 

As Americans grapple with inflationary prices post-Covid, it’s no surprise that the percentage of dollar store shoppers has risen over the last two years. In 2024, 69% of U.S. adults say they or their family currently shop at these discount retailers to some extent, up from 61% in 2022. At the same time, grocery shopping at dollar stores has increased since 2022, when consumers altered their grocery shopping habits. Sixty-three percent of households purchase groceries from dollar stores to some extent, up from 41% in 2023.

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Additional data indicate that buying essential household goods, such as cleaning supplies and paper products, at dollar stores is popular among Americans. Among those who purchase household items, nearly 30% say they typically purchase them from dollar stores – less than big-box retailers which take first place at 59% and grocery stores at 42%, but greater than Amazon or other online-only retailers at 22%.¹

2. However, dollar store customers are cutting back.

Despite more consumers shopping at dollar stores, they’re cutting back on purchases due to rising costs more than non-dollar store shoppers overall. Over the last few quarters, CivicScience’s ongoing data show that dollar store customers are increasingly cutting back on groceries, streaming services, food delivery, and household items — nearly all of which outpace the percentages of non-dollar store shoppers cutting back. 

Grocery, in particular, could be hitting dollar stores hard as groceries are a core product sold. In Q3, 39% of dollar store shoppers said they reduced spending on groceries or plan to, compared to 35% of non-shoppers.

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3. Will opening new stores be the way forward? Here’s what data about online vs. in-store for dollar store shoppers. 

Opening new stores could be helpful for dollar stores, but they also need to hone in on online shopping. Although data show that 43% of dollar store shoppers say they do the majority of their shopping in-store, that’s less than 50% of non-dollar store shoppers. Instead, dollar store shoppers are seven percentage points more likely to do all or most of their shopping online, hinting that dollar stores should also focus on their online offerings to win back customers. 

Additional data show that online dollar store shoppers are more likely to live in cities, but many suburban and rural shoppers still shop online. In-store-only shoppers are slightly more likely to be lower income than online-only shoppers.²

Despite the rise in dollar store shoppers, these retailers may be losing their foothold as their customers cut back and lean toward online shopping. This shift suggests that opening more retail stores may not be enough to maintain their position, and dollar stores will also need to focus on making their online offerings convenient.

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