Jul 26, 2022

Dollar Stores Foot Traffic ‘Carries the Baton’ for Retail

written by Paul Bergeron, Globest

More consumers are seeking a bargain – or at least lower prices – according to foot traffic data from Placer.ai, which reported that dollar stores are “carrying the baton” for the retail sector heading into the third quarter.

While many retailers showed a slowdown in foot traffic during Q2, dollar and discount stores remained above pre-pandemic levels — significantly, in most cases, Placer.ai reported.

Visits were up 13.2% during Q2 compared to Q1 2022, up 8% compared to Q2 2021, and up 20.5% compared to Q2 2019.

Stretching a Dollar to $1.25

Once there, shoppers will see that $1 items are now priced at $1.25, and Dollar Tree said that forced them to remove some of their more popular items.

At the start of the year, Forbes reported that several large national chains say they plan to cumulatively open thousands of new stores over the next 12 months, “a remarkable sign given all the doom and gloom about physical stores” from the pandemic, Forbes wrote, citing these chains appeal to American shoppers emerging from the pandemic.

The Food Institute reported that Dollar General plans to open 1,110 new stores in its 2022 fiscal year and Dollar Tree is bolstering its supply chain to keep up with its own ambitious expansion plans, as first reported in The Wall Street Journal.

Looking back even farther, CNN reported that since the Great Recession, three dollar-store chains have grown faster than nearly any other retailers, often in underserved areas. Dollar stores tend to target those with annual incomes of $40,000 or less, according to CNN.

AARP wrote in May how to find the “best bargains” at dollar stores.

Sure enough, looking at year-over-year visit growth, Family Dollar led the group with foot traffic up 16.3%. Visits to Five Below were up 10.2%, Dollar General saw an 8.5% spike and Dollar Tree registered a 5.9% bump.

Looking quarter-over-quarter, visits for the sector overall were up 2.9%. They were also up on a year-over-year basis (0.4%), and compared to 2019, before the pandemic (1.8%). Visits have shown a decline in recent weeks, however.

Grocer, Mid-Priced Retailers and Wholesale Club Highlights

Mid-priced retailers Target (5.1%) and Walmart (4.7%) saw foot traffic increases, Placer.ai said.

Grocers Aldi (23.3%) and Trader Joe’s (12.2%) are still seeing “sky-high” visit levels in June compared to June 2019.

Wholesale clubs such as Costco and BJ’s had rough quarters, with visits down 4.4% at BJ’s, down 3.2% at Costco, and down 2.6% at Sam’s Club year-over-year.


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