DOLLAR STORES CREATE OPPORTUNITIES, PROBLEMS
Growth of low-cost retailers in Connecticut part of national trend
Shifting consumer habits may have led to the demise of several big-box retail chains, but they have also helped boost the presence of dollar stores nationwide, including in Connecticut.
The top three dollar-store names in America — Dollar General, Dollar Tree and its subsidiary, Family Dollar — opened more than 1,800 stores last year.
With 30,000 stores nationwide split equally among both chains, Forbes reported that the dollar store industry has surpassed the likes of Walmart, Kroger, Costco, Home Depot, CVS and Walgreens combined in the number of stores open.
While chain stores haven’t
“Consumers are also looking for convenience, so they would need to find a place where they could go and get everything done at one go rather than spending money on effort and on gas to go to another store ... If a dollar store turns up in those communities, the local business will be affected. There is no doubt about that.” Mousumi Godbole, of Fairfield University
fared well in the growing online shopping war, dollar stores are essentially Amazon-proof due largely to their low prices, which have carved out a niche among other lower-price retailers.
But though they offer convenience and bargains to shoppers, there are some industry observers who suggest the rapid growth of the dollar store market has placed added strain on local businesses that rely heavily on community support.
“Consumers are also looking for convenience, so they would need to find a place where they could go and get everything done at one go rather than spending money on effort and on gas to go to another store to get something else,” said Mousumi Godbole, of Fairfield University. “If a dollar store turns up in those communities, the local business will be affected. There is no doubt about that.”
Independent businesses — particularly grocers, since dollars stores often offer canned and dried goods — also see the threat to local storefronts that rely on walk-in or neighborhood traffic.
“What you’re seeing with the dollar stores is part of the relentless price pressure that went along for years with Walmart and
now for the last handful of years it has been just as dramatic with the Amazon phenomenon and online shopping in general,” Lavernoich said.
To survive, he and Godbole suggested that local businesses, particularly grocers, could benefit from adding more services and products that aren’t carried in dollar stores to remain viable to local consumers.
“The pressure on independent retailers is undeniable, and it’s relentless and it’s not going away anytime soon,” said Ed Lavernoich, Bridgeport Economic Development Corporation with the Bridgeport Regional Business Council.
Filling a void
On the other hand, both urban and some suburban neighborhoods have benefited from the dollar stores popping up and meeting the demand for retail convenience and value.
While some feel the growing number of dollar stores may encroach on local businesses, market observers suggest the contrary.
“It’s a good thing from the perspec-
tive that you’re activating spaces, and, in some cases, you are seeing lots cleaned up,” Lavernoich said, adding that Bridgeport has seen a blighted lot near Cesar Batalla School turned into a new retail location that now accommodates a Family Dollar.
The valley has also seen several dollar stores open in the past year, including at the Quarry Walk shopping hub in Oxford and in the Route 34 plaza in Derby, where a Big Y is expected to open.
“It is a phenomenon there’s no doubt about it,” said Bill Purcell, director of the Greater Valley chamber of Commerce.
To the extent that retailers continue to survive shifting consumer habits, Purcell said, it’s probably the surge of dollar stores that will create potential tenancies in retail plazas looking to fill vacancies.
The added benefit is that dollar stores are also filling spaces and providing services that keep residents from having to leave their community or city to purchase goods, he said.
“I think the positive benefits is that they drive traffic to other (local) stores,” Purcell said.