The rise of the dollar store appears to be part of a broader renewal in physical retail that clashes with long-held assumptions about powerful e-commerce players like Amazon’s impact on traditional shopping habits.
Dollar store dominance is a trend that is playing out in Canada as well as in US. Dollarama’s same-store sales, a key measure of retail success, jumped 6.1 per cent in its second quarter over the same period last year. The company’s Toronto-listed shares hit an all-time high earlier this month.
Tony Chapman, Marketing and brand expert said the trend is a troubling one for those who cherish a vibrant in-person shopping experience. He worries the changing mix of retail outlets will spell trouble, on Main Street and at the mall, as more prestigious brands scramble to shrink the physical footprints.
A recent study by global research and advisory firm IHL Group suggests large U.S. retailers will open 4,080 more locations than they close this year. That figure is projected to rise to more than 5,500 in 2018. IHL found 46 per cent of the expansion among the top 16 fastest-growing brands was driven by just two U.S. chains — Dollar General and Dollar Tree.