50949_WKBW_7_Problem_Solvers_658x90.png

Actions

Dollar stores are adding more locations amid shrinking sales numbers

It's a curious strategy from an analyst's perspective, but stores like Dollar Tree appear to be adding locations as some dollar stores report increased competition.
Dollar Tree store locations and other dollar stores increase
Posted

Dollar stores around the country serve a specific market and have seen increases in locations in rural areas, but they have been grappling with slow spending and a reduced customer base recently.

That has affected name brands in the segment, and their earnings.

Dollar Tree and Dollar General are two of the United States' largest brands in the area of dollar stores. These brands are set to open up around 1,300 new locations this fiscal year alone.

RELATED STORY | Cash-back fees at dollar stores and other retailers are steep, affect some communities disproportionately

They face increased competition and shrinking sales, two factors that may normally halt retail expansion.

A Wall Street Journal report said companies like Target and Walmart are investing in other shopping options for consumers, which have contributed to a decline in spending at dollar stores.

AARP recently reported on price increases at dollar stores, listing the items that are still left at the stores that cost a dollar.

In March Dollar Tree Inc. reported to investors a diluted loss per share of $7.85 for 2023, writing that the company was "still in the early stages of" a "transformation journey."

But the market headwinds haven't stopped dollar store brands.

Instead, executives believe new stores could be key to boosting sales.