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Dollar Tree’s decision to sell Family Dollar marks a significant shift in the discount retail landscape, underscoring the challenges facing budget retailers. Rising inflation, retail theft, and the expiration of pandemic-era government benefits have all contributed to Family Dollar’s struggles, driving Dollar Tree to sell the chain.
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With Family Dollar’s future uncertain, CivicScience took a closer look at the state of dollar stores overall. Data shows that interest in shopping at dollar store chains—Dollar General, Family Dollar, and Dollar Tree—spiked during the pandemic and remained steady until 2024, when each chain saw a small uptick in favorability. Compared to 2024, favorability toward shopping at Family Dollar and Dollar Tree has risen by two percentage points, while favorability for Dollar General has remained unchanged.
Favorability among lower-income households (earning under $50K annually) has remained steady since 2020, indicating slowing growth within this demographic. Meanwhile, favorability toward shopping at dollar stores increased among middle- ($50K–$100K) and high-income ($100K+) households in 2020. However, a second increase occurred among these income groups between 2023 and 2024, but only for Dollar General and Dollar Tree.
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While consumers are feeling more favorable toward top dollar store chains, additional data show it’s not enough to stop a drop in traffic. CivicScience data indicates a decline in dollar store shopping so far this year compared to last year—33% of U.S. adults now say they ‘rarely or never’ shop at these retailers, up from 31% in 2024. Frequent dollar store shoppers are particularly important to watch, as they report higher levels of fear, which increases their likelihood of switching propensity. Those who shop at dollar stores at least several times a month are more likely than non-shoppers to switch cable or satellite providers, mobile phone carriers, and health insurance plans.
Use this Data: CivicScience clients use insights like these to understand shifting consumer behaviors that could impact the growth and retention of their customer base.
Frequent dollar store shoppers are also more likely than the Gen Pop to be cutting back right now. Over the last 365 days, 86% of frequent dollar store shoppers report cutting back in at least one area due to inflation/rising prices – five percentage points higher than the Gen Pop (81%). Those who shop at dollar stores at least several times per month are more likely than the Gen Pop to be cutting back on fast food restaurants, fast casual restaurants, and gasoline.
The pullback in dollar store shopping serves as a red flag for retailers, as budget-conscious consumers are cutting back due to inflation and financial strain. The economic climate, coupled with strong feelings of fear is driving greater switching behavior, with frequent dollar store shoppers more likely to change service providers and brands in search of better deals. These shifts highlight growing price sensitivity, signaling the need for businesses to adapt their strategies to retain cost-conscious consumers in an increasingly uncertain economy.
