GUESS WHO’S SHOPPING AT DOLLAR STORES ? WELL-TO-DO MILLENNIALS
Before now, Victoria Marin, an author and educator who is 35 years old usually expand several dollars shopping at big party-goods stores on goods that didn’t add much value to her. Things changed however after she stumbled on the neighbourhood Dollar General store on a day she visited just to purchase cheap paper napkins and plastic cups. That day, she discovered that the store was just like a small supermarket where she could purchase groceries, Christmas decorations and of course apparels at prices more affordable than what is offered at big stores like Wal-Mart or Shoprite.
With a family yearly gross income of $150,000, Marin made it known that shopping in a place like dollar stores felt uncomfortable at the initial stage but things began to take a new turn overtime for herself and several other shoppers especially with the
Marin whose family of six resides upstate New York further stated that her family growth over the years was one of the factors that made her stick to her new style of shopping based in the fact that she could purchase same items at a dollar store for less.
Marin is part of the rising group of wealthy millennial who choose to pay less for daily products and spend more on things like cars or homes. As influential as they are, it is clear that they can afford to spend in big stores rather than shop at dollar stores that retail products commonly valued between $1 and $10. However, they are gradually making the latter their choice.
Although the term millennial does not have a generally accepted definition, but according to experts, it is used to describe those born around 1980 and 2000.
Dollar General Corp (NYSE:DG) , the next biggest dollar store after Dollar Tree (NASDAQ:DLTR) in its post-earnings declaration last month revealed this analytics as a crucial factor for its income.
As specified by market researcher’s NDP’s checkout tracking that tracks customer’s receipts, approximately 29 percent out of the millennial who purchased goods at Dollar General, Dollar Tree and Dollar Tree-owned Family Dollar stores in the last year grossed over $100,000 annually and are responsible for a couple of purchase at these stores.
Efforts have been made by Dollar stores to correct the views that their supplies are only for those with low-income and have also devoted themselves to absorbing consumers who used cut down their purchase at large stores after the economic downturn. Dollar stores now looks like a Walmart or Target store on the inside in line with its large range of consumables, beauty products and over-the-counter drugs.
Eric Brantner, a freelance copywriter who is 33 years old and resides in Houston with about $100,000 annual income, stated that he now purchase a large number of toiletries at Dollar Tree although not the household names. He further gave example of the cotton swabs which is a different brand from Q-tips but serve the same purpose as Q-tips and is sold for less.
In addition, Dollar stores over the years have increased in numbers thus making them an easily accessed store in cities and small towns. Dollar General runs over 12,700 stores in the United States and Dollar Tree on the other hand runs roughly 14,000 stores in both United States and Canada.
According to Nielsen data, there was an increase of about 7.1 percent from around 2012 – 2015 in the number of family head below 35 years of age with annual income of $100,000 who purchase goods at Dollar stores as opposed to 3.6 percent rise in retail stores generally.
As against the anticipations of experts, both Dollar General and Dollar Tree recorded higher returns for the most recent quarter different from the low returns recorded at department stores like Macy’s Inc and Target.
Dollar General however made it known that millennial are major contributors of about 24 percent of its returns in the first quarter with low and mid income millennial inclusive. Both Dollar General and Dollar Tree refused to give more information to the public than they already revealed.