Dollar Stores Outnumber National Drug Stores
SEATTLE -- Dollar store chains have solidified their position in the retail marketplace by outnumbering the largest national drug store chains, according to a new study by Colliers International.
The report, "Dollar Days: How Dollar Stores are Growing in a Weak Economy," states that the combined store count of the four major dollar store chains -- Dollar General, Dollar Tree, Family Dollar and 99 Cents Only -- surpassed the combined store count of the three largest U.S. drug store chains -- Walgreens, CVS and Rite Aid -- as of the middle of this year.
"The rapid evaporation of wealth (both real and perceived), has profoundly changed the way Americans shop and how they define value," said Ann Natunewicz, national manager of U.S. retail research for Colliers International. "Dollar stores now serve a larger consumer base, which is fueling unprecedented growth in dollar-store leasing and a significant shift in the types of retail space they take.”
The major dollar store chains now operate approximately 21,500 locations in the United States and occupy an average of 7,000 to 10,000 square feet. According to the study, key factors in this expansion are that products offering more value are becoming more sought-after; dollar stores are going "main street" as they become a more accepted tenant and can occupy better real estate locations; and more aggressive real estate programs are leading to renting larger spaces and building new ground-up locations.
"The convenience they provide -- bringing better products at lower prices closer to the consumer -- helps dollar stores to better serve existing customers and attract new ones," said Natunewicz. "Retail is habit-forming; the longer shoppers patronize a particular store or category, the more likely it is to become a permanent shopping destination." A copy of the Colliers International report is available for download as a PDF here.