Updated Jan 12, 2019 - Economy & Business

The dollar store future

If you are one of the tens of millions of Amazon Prime members in the U.S., it’s easy to presume that online shopping will be future for everyone.

Data: Dollar General, U.S. Census Bureau; Chart: Harry Stevens/Axios
Data: Dollar General, U.S. Census Bureau; Chart: Harry Stevens/Axios

But over the next five years we will see an America that is divided by how and where we shop, with low income and rural Americans depending on discount outlets like Dollar General and Family Dollar, where the primary value proposition is not convenience but price — a fact that isn't likely to change.

  • In a new survey by Axios/SurveyMonkey, 71% of respondents with a household income of less than $50,000 a year said they preferred shopping in a store over online, compared to only 54% of those in households with income over $100,000.
  • "To shop [online] at Old Navy, you need to spend $50 for free shipping. And if you don't spend that much, there is a $5 shipping charge, which is half of one additional item.... It’s material for some consumers," Kimberly Greenberger, an analyst with Morgan Stanley, tells Axios.
  • Even Walmart has a $35 minimum for free delivery, a threshold that is too high for many consumers.

The bottom line: Online shopping will continue to grow in popularity with higher and middle-income shoppers, but won't compete with the flexibility and rock bottom prices of dollar stores.

Special report: The future of retail

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