CivicScience | Dollar Stores and Amazon Compete for Customers Looking for Steals

General, Hospitality

Dollar Stores and Amazon Compete for Customers Looking for Steals

Image Credit: Mike Mozart via Flickr

Dollar stores have been on a massive upward swing over the last decade, with a new dollar store opening somewhere in America every six hours, according to Business Insider. 

But while those numbers are clearly fantastic, a recent CivicScience study of three of the nation’s largest dollar store chains – Dollar Tree, Dollar General, and Family Dollar – shows the favorability of the stores in relative stasis.  

Over the last three years, Dollar General favorability among U.S. adults has leveled off in the 38% range, Dollar Tree in the 43% area, Family Dollar in the 31% level. All three numbers are down from the top quarterly numbers over the time span.

Gender and Income Matter Most

Age, as it turns out, is not a huge marker when it comes to whether or not someone enjoys shopping at either Dollar Tree or Dollar General. Gen Z over-indexes slightly when it comes to Dollar General and Family Dollar, and the 55+ crowd has a more favorable view of Dollar Tree.

Gender, however, plays a massive role. Women have a favorable view of Family Dollar at a 32% higher rate than men and a more favorable view of Dollar General at a 37% higher rate. It’s the same plus more at Dollar Tree, with women enjoying shopping there at a whopping 57% higher rate than men. 

Income plays a major role in experience with dollar stores. The more household income someone has, the less likely that person will be to have a favorable opinion of shopping at dollar stores.

Tariff Tiff

Much has been made about the Administration’s tariff policy, specifically with China. Many analysts, as a result, have expressed concern with the ability of dollar stores to weather the storm. And with good reason, as nearly half of U.S. adults who are concerned with the impact of recent trade policies have a favorable view of dollar stores.

Among people who said they are buying less than they used to because prices are higher, 47% have a favorable view of Dollar Tree. People feeling the impact of tariffs on prices have favorable views of Dollar General and Family Dollar at lower rates (37% for both).

Those feeling the effects of tariffs on prices are still more favorable toward these three dollar stores than those who haven’t felt the effects of tariffs.

Here Comes Amazon

For years, dollar stores were one of the few industries considered “Amazon-proof.” But in recent months, Amazon’s decision to give Prime customers free delivery on any Prime-eligible item, regardless of price, has the potential to put a dent in that “Amazon-proof” talk dollar stores have enjoyed for so long.

In fact, people with an Amazon Prime account have less favorable views of Dollar General and Dollar Tree compared to people who don’t have an Amazon Prime account.

The numbers for Family Dollar are a little different, with Amazon Prime holders having near equal favorability for the chain as non-Amazon Prime holders.

Savers and Spendthrifts Both in Play

Here’s an interesting takeaway: People who say they are careful with their money – as well as people who say they aren’t careful with their money – both have more favorable views of the dollar store chains compared to Americans who claim to have neutral spending habits.  Spendthrifts actually over-index at Dollar General and Dollar Tree.

Dollar stores are still on the rise, though there is potential for Amazon to peel some customers away with free shipping on any item, no matter how small. However, there is clearly room for growth among the male population, and figuring out ways to get higher-income people interested could stay the competition with Amazon Prime.

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