Dollar & Other General Merchandise Stores Industry Profile

Companies in this industry sell a variety of merchandise, including consumables and housewares, through physical retail locations. Major companies include Dollar General and Dollar Tree (both based in the US), along with Dollarama (Canada) and Poundland Group (UK).

The dollar and other general merchandise stores industry in the US includes about 4,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $75 billion.

COMPETITIVE LANDSCAPE

Demand is driven by consumer spending, particularly among less affluent consumers, as most companies target the lower- to middle-income demographic. The profitability of individual companies depends on their ability to effectively locate stores and to maximize their revenue per square foot. Large companies have advantages in purchasing and in negotiating lease arrangements. Small companies can compete effectively by locating in a previously untapped market. The industry is highly concentrated; The top 50 largest firms account for about 90% of the industry revenue.

Dollar stores compete not only within their industry, but also with mass merchandisers, grocery stores, drug stores, and convenience stores. Industry leaders Dollar General and Dollar Tree have moved aggressively into the convenience store arena with smaller-format stores, beverage bars, coffee stations, and grab-and-go sandwich offerings. (Mass merchants Walmart and Target have also launched smaller-format stores in urban areas that also compete with dollar stores.) Dollar stores are less affected by online competition than other retail formats because of their focus on ...