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Strategy We visited Dollar Tree and Dollar General to see which was a better store — and the winner was clear (DG, DLTR)

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Dollar Tree and Dollar General are the two biggest dollar stores in the US. We visited both to see how the shopping experience compared.

Dollar Tree offers a no-frills shopping experience. play

Dollar Tree offers a no-frills shopping experience.

(Business Insider/Mary Hanbury)

  • Dollar Tree and Dollar General are the two largest dollar stores in the US.
  • The stores are neck-and-neck in terms of store count and annual sales.
  • But there are some big differences in the shopping experiences you'll have at these stores.

Bargain-hunting has been the flavor of the past decade.

Since the recession, cost-conscious consumers have flocked to off-price, thrift, and dollar stores in search of good deals. As a result, these stores have seen a surge in sales.

From 2010 to 2015, US dollar-store sales grew to $45.3 billion from $30.4 billion, and hundreds of stores have opened. The credit-rating agency Moody's said in a report on Dollar Tree that it was expecting 8% growth for the dollar-store segment in 2018. That's about double the growth of 3.5% to 4.5% it expects for US retail in general during the same time.

Dollar General and Dollar Tree are the two largest dollar stores in the US. Based on numbers alone, these stores are almost identical.

Dollar Tree, which bought its rival chain Family Dollar in 2015, has slightly more locations than Dollar General, but both have about 14,000 to 15,000. In terms of sales, Dollar Tree is a close second, generating $21.5 billion annually compared with $23.3 billion at Dollar General, according to Moody's.

But there is a massive difference in shopping at these no-frills stores. First and foremost, Dollar Tree sells only products that are $1 or under, whereas Dollar General, which once did the same, is now more like a discount retailer.

We visited both to see how they compared:

We visited Dollar General and Dollar Tree stores that were a 15-minute walk from each other in Brooklyn, New York.

We visited Dollar General and Dollar Tree stores that were a 15-minute walk from each other in Brooklyn, New York. play

We visited Dollar General and Dollar Tree stores that were a 15-minute walk from each other in Brooklyn, New York.

(Google Maps)


Our first stop was at Dollar General. The chain has 14,321 stores in the US, most of which are located in rural areas. In February, it announced plans to open 900 more locations in 2018.

Dollar General and other dollar stores are dominating retail in 2018. play

Dollar General and other dollar stores are dominating retail in 2018.

(Business Insider/Mary Hanbury)

Dollar General was initially rolled out to areas that were not already served by a Walmart. As these stores are generally in rural markets, they cost less to operate.

Walmart launched a series of mini express stores in 2014 with the aim of winning back the midweek shopper from Dollar General. The strategy was not successful, and Walmart ended up closing these stores and selling 41 of the locations to Dollar General.

Source: Dollar General and Business Insider



On first impression, the store looked great. It was modern and bright.

On first impression, the store looked great. It was modern and bright. play

On first impression, the store looked great. It was modern and bright.

(Business Insider/Mary Hanbury)


While Dollar General isn't strictly a dollar store, prices are generally 20% to 40% lower than at traditional grocery and drug stores, according to a report by the credit-rating company Moody's.

While Dollar General isn't strictly a dollar store, prices are generally 20% to 40% lower than at traditional grocery and drug stores, according to a report by the credit-rating company Moody's. play

While Dollar General isn't strictly a dollar store, prices are generally 20% to 40% lower than at traditional grocery and drug stores, according to a report by the credit-rating company Moody's.

(Business Insider/Mary Hanbury)

The company's target shopper comes from a household making $40,000 or less a year.

"The economy is continuing to create more of our core customer," Dollar General CEO Todd Vasos told The Wall Street Journal in December.

When the economy bites, the company flourishes.

"We are putting stores today [in areas] that perhaps five years ago were just on the cusp of probably not being our demographic, and it has now turned to being our demographic," Vasos said.



At the front of the store there was a large selection of snacks, drinks, and candy.

At the front of the store there was a large selection of snacks, drinks, and candy. play

At the front of the store there was a large selection of snacks, drinks, and candy.

(Business Insider/Mary Hanbury)


Next to this was a small "fresh produce" section. The company has been adding groceries and fresh produce to drive traffic to stores. By offering a bigger selection, it can better compete with Walmart.

Next to this was a small "fresh produce" section. The company has been adding groceries and fresh produce to drive traffic to stores. By offering a bigger selection, it can better compete with Walmart. play

Next to this was a small "fresh produce" section. The company has been adding groceries and fresh produce to drive traffic to stores. By offering a bigger selection, it can better compete with Walmart.

(Business Insider/Mary Hanbury)

Vasos said that Dollar General would roll out fresh produce to 100 more stores and said that same-store sales numbers were three times higher in stores that stocked fresh produce than those that didn't.



This store didn't have fresh fruit or vegetables, but you could pick up basics such as milk and eggs. There definitely wasn't enough here to do your weekly grocery shopping, but it could be enough to grab some essentials midweek.

This store didn't have fresh fruit or vegetables, but you could pick up basics such as milk and eggs. There definitely wasn't enough here to do your weekly grocery shopping, but it could be enough to grab some essentials midweek. play

This store didn't have fresh fruit or vegetables, but you could pick up basics such as milk and eggs. There definitely wasn't enough here to do your weekly grocery shopping, but it could be enough to grab some essentials midweek.

(Business Insider/Mary Hanbury)


While there were a ton of deals on well-known products ...

While there were a ton of deals on well-known products ... play

While there were a ton of deals on well-known products ...

(Business Insider/Mary Hanbury)


... you also had the option to pick up lower-cost, private-label items.

... you also had the option to pick up lower-cost, private-label items. play

... you also had the option to pick up lower-cost, private-label items.

(Business Insider/Mary Hanbury)


On average, the company's stores are 7,300 square feet in size. Considering this is one-tenth of the size of a Walmart store, we were impressed by the variety of products on offer.

On average, the company's stores are 7,300 square feet in size. Considering this is one-tenth of the size of a Walmart store, we were impressed by the variety of products on offer. play

On average, the company's stores are 7,300 square feet in size. Considering this is one-tenth of the size of a Walmart store, we were impressed by the variety of products on offer.

(Business Insider/Mary Hanbury)

Source: Dollar General



Dollar General is known for its affordable, basic products.

Dollar General is known for its affordable, basic products. play

Dollar General is known for its affordable, basic products.

(Business Insider/Mary Hanbury)


The more expensive items were placed behind a plastic barrier. When you lift the plastic, a beeping noise sounds.

The more expensive items were placed behind a plastic barrier. When you lift the plastic, a beeping noise sounds. play

The more expensive items were placed behind a plastic barrier. When you lift the plastic, a beeping noise sounds.

(Business Insider/Mary Hanbury)


Some products were packaged in smaller quantities to keep prices down.

Some products were packaged in smaller quantities to keep prices down. play

Some products were packaged in smaller quantities to keep prices down.

(Business Insider/Mary Hanbury)

Instead of selling items in bulk, allowing for long-term savings, dollar stores sell small quantities of items that customers can afford. But, this ultimately means the customer will pay more on a per-ounce or per-item basis in the long run.



The chain started off in 1955 as a true dollar store, where everything cost $1. Today, you can still find some $1 deals.

The chain started off in 1955 as a true dollar store, where everything cost $1. Today, you can still find some $1 deals. play

The chain started off in 1955 as a true dollar store, where everything cost $1. Today, you can still find some $1 deals.

(Business Insider/Mary Hanbury)


There were lots of women's and men's beauty and grooming products.

There were lots of women's and men's beauty and grooming products. play

There were lots of women's and men's beauty and grooming products.

(Business Insider/Mary Hanbury)


We spotted some well-known brands, such as Maybelline, at big discounts.

We spotted some well-known brands, such as Maybelline, at big discounts. play

We spotted some well-known brands, such as Maybelline, at big discounts.

(Business Insider/Mary Hanbury)


There was a small clothing section in this store, but the majority of the space was taken up by home-ware and kitchenware. You could even pick up a $14 barbecue.

There was a small clothing section in this store, but the majority of the space was taken up by home-ware and kitchenware. You could even pick up a $14 barbecue. play

There was a small clothing section in this store, but the majority of the space was taken up by home-ware and kitchenware. You could even pick up a $14 barbecue.

(Business Insider/Mary Hanbury)


At the cashier, you could buy magazines, gift cards, and cigarettes. This location did not sell alcohol. Overall, the store was a good size, easy to navigate, and a convenient way to shop for essentials.

At the cashier, you could buy magazines, gift cards, and cigarettes. This location did not sell alcohol. Overall, the store was a good size, easy to navigate, and a convenient way to shop for essentials. play

At the cashier, you could buy magazines, gift cards, and cigarettes. This location did not sell alcohol. Overall, the store was a good size, easy to navigate, and a convenient way to shop for essentials.

(Business Insider/Mary Hanbury)


Dollar Tree instantly set a different tone.

Dollar Tree instantly set a different tone. play

Dollar Tree instantly set a different tone.

(Business Insider/Mary Hanbury)

These stores are predominantly located in suburban areas.



The store had a bare-bones design and looked tired and rundown. However, it stayed true to its name, and everything cost $1.

The store had a bare-bones design and looked tired and rundown. However, it stayed true to its name, and everything cost $1. play

The store had a bare-bones design and looked tired and rundown. However, it stayed true to its name, and everything cost $1.

(Business Insider/Mary Hanbury)


The chain's seasonal merchandise accounts for 49% of its revenues, according to Moody's. Almost a quarter of this store was taken up by seasonal items — there were a lot of Easter toys, chocolates, and St Patrick's Day decorations.

The chain's seasonal merchandise accounts for 49% of its revenues, according to Moody's. Almost a quarter of this store was taken up by seasonal items — there were a lot of Easter toys, chocolates, and St Patrick's Day decorations. play

The chain's seasonal merchandise accounts for 49% of its revenues, according to Moody's. Almost a quarter of this store was taken up by seasonal items — there were a lot of Easter toys, chocolates, and St Patrick's Day decorations.

(Business Insider/Mary Hanbury)

The store changes its assortment constantly, which gives its shoppers a treasure-hunt kind of experience. For this reason, e-commerce retailers such as Amazon are less of a threat to the store.

"Dollar stores have not sought online penetration for the simple reason that they don't have to," according to Moody's.

Despite this, both Dollar Tree and Dollar General have an online platform.



There were three rows devoted to greeting cards.

There were three rows devoted to greeting cards. play

There were three rows devoted to greeting cards.

(Business Insider/Mary Hanbury)


The store is definitely less slick than Dollar General. There were lots of unpacked boxes and abandoned crates. In one corner, we spotted a stray traffic cone.

The store is definitely less slick than Dollar General. There were lots of unpacked boxes and abandoned crates. In one corner, we spotted a stray traffic cone. play

The store is definitely less slick than Dollar General. There were lots of unpacked boxes and abandoned crates. In one corner, we spotted a stray traffic cone.

(Business Insider/Mary Hanbury)


Dollar General reported worse-than-expected results in its most recent quarter. Same-store sales rose 3.8% at Dollar Tree and 1% at Family Dollar, a rival chain that it bought in 2015. Meanwhile, same-store sales grew 4.3% at Dollar General in the third quarter of 2017. It has not yet reported fourth-quarter results.

Dollar General reported worse-than-expected results in its most recent quarter. Same-store sales rose 3.8% at Dollar Tree and 1% at Family Dollar, a rival chain that it bought in 2015. Meanwhile, same-store sales grew 4.3% at Dollar General in the third quarter of 2017. It has not yet reported fourth-quarter results. play

Dollar General reported worse-than-expected results in its most recent quarter. Same-store sales rose 3.8% at Dollar Tree and 1% at Family Dollar, a rival chain that it bought in 2015. Meanwhile, same-store sales grew 4.3% at Dollar General in the third quarter of 2017. It has not yet reported fourth-quarter results.

(Business Insider/Mary Hanbury)

Dollar Tree acquired Family Dollar for $8.8 billion in 2015.



Dollar Tree stores are between 8,000 and 12,000 square feet, which makes them much larger than Dollar General. The shelves were completely empty in some parts of the store.

You could pick up a pregnancy test for $1. play

You could pick up a pregnancy test for $1.

(Business Insider/Mary Hanbury)


Although everything here is $1, some of the brands were less well-known.

Although everything here is $1, some of the brands were less well-known. play

Although everything here is $1, some of the brands were less well-known.

(Business Insider/Mary Hanbury)


The grocery section of the store was larger than Dollar General's. But, there was no fresh produce.

The grocery section of the store was larger than Dollar General's. But, there was no fresh produce. play

The grocery section of the store was larger than Dollar General's. But, there was no fresh produce.

(Business Insider/Mary Hanbury)

Dollar Tree has also increased the number of food and drink items it sells, as these drive traffic into stores.



There were lots of non-perishable products such as chips, pasta, dried herbs, and oatmeal.

There were lots of non-perishable products such as chips, pasta, dried herbs, and oatmeal. play

There were lots of non-perishable products such as chips, pasta, dried herbs, and oatmeal.

(Business Insider/Mary Hanbury)


The frozen-food section was also much larger here. You could even pick up a steak for $1.

The frozen-food section was also much larger here. You could even pick up a steak for $1. play

The frozen-food section was also much larger here. You could even pick up a steak for $1.

(Business Insider/Mary Hanbury)


We spotted some more premium products dotted around the store ...

We spotted some more premium products dotted around the store ... play

We spotted some more premium products dotted around the store ...

(Business Insider/Mary Hanbury)


... including Betty Crocker baking kits and Hershey's ice cream.

... including Betty Crocker baking kits and Hershey's ice cream. play

... including Betty Crocker baking kits and Hershey's ice cream.

(Business Insider/Mary Hanbury)


The remaining part of the store was stocked with beauty products, children's toys, and accessories.

Dollar stores are all about low prices — not aesthetics. play

Dollar stores are all about low prices — not aesthetics.

(Business Insider/Mary Hanbury)


The kitchenware section was impressive. These glasses were a steal at $1, and there were lots of cheap crockery and cooking utensils.

The kitchenware section was impressive. These glasses were a steal at $1, and there were lots of cheap crockery and cooking utensils. play

The kitchenware section was impressive. These glasses were a steal at $1, and there were lots of cheap crockery and cooking utensils.

(Business Insider/Mary Hanbury)


There are definitely a lot of bargains to be had at Dollar Tree, but it didn't feel like the place you could do a weekly shop. Many of the shelves were bare, which also felt depressing.

There are definitely a lot of bargains to be had at Dollar Tree, but it didn't feel like the place you could do a weekly shop. Many of the shelves were bare, which also felt depressing. play

There are definitely a lot of bargains to be had at Dollar Tree, but it didn't feel like the place you could do a weekly shop. Many of the shelves were bare, which also felt depressing.

(Business Insider/Mary Hanbury)


All in all, it was a bit of a mess.

play

(Business Insider/Mary Hanbury)

The verdict: Dollar General was leaps and bounds ahead of Dollar Tree in terms of the shopping experience and quality of products. It felt as if Dollar Tree were relying on the fact that its low prices would always draw customers in, and while this may be true, Dollar General definitely seemed like a bigger threat to stores like Walmart. Dollar General is somewhere between a dollar store and a traditional store, which means it is well-positioned to win over more customers.



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