Dollar stores have traditionally disappeared into the shadows of the retail industry, often being overlooked as giants such as Wal-Mart dominated majority of small-item consumer sales. However, the past few months have proved the resilience of the local dollar store. Smaller chains such as Dollarama and DollarTree have seen a boom in sales as consumers are opting to save on any expense possible.
The recent trend in consumer spending has sparked new strategies from other giants. Wal-Mart and Canadian Tire have recently ramped up promotion of “dollar deal” merchandise, and have begun stocking much more 1$, 2$, and 3$ items.
But what does this mean for consumers? I believe that the gradual shift towards more practical, lower priced merchandise is an indication of a slowly stabilizing economy. Although it would appear the consumer spending has decreased, people are simply trying to maximize their utility with what they have at this time. A move towards cheaper merchandise indicates a step away from the need to take on credit, which in turn should lower the average consumer debt load.
Ultimately, the dollar store has made a strong comeback which not only boosts the economy, but also promotes the longer term stability which is much needed during these times.