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With inflation putting pressure on household budgets, many consumers have turned to dollar stores in search of bargains. Where else can you stock up on everything from greeting cards to canned food for $1?
The trend is clear when it comes to food, which has seen a 25 percent increase in cost since the pandemic. Last year, dollar stores were the fastest-growing food retailers in the U.S., with market share doubling in rural areas, according to Tufts University research.
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For older adults, especially those on a fixed income, finding ways to beat rising food costs is critical given that in 2022 nearly 11.8 million Americans 50 and older faced food insecurity and the threat of hunger. But buyers beware: These days “dollar” stores are more like “$1.25-and-up” stores.
“Dollar stores have seen profits shrink, apparently, so they have tried to find ways to make more money,” said Edgar Dworsky, founder and editor of Consumer World. “My sense is the wholesale price of many goods that they used to sell for a dollar has gotten close to or is now over a dollar, so they can’t make any money on them.”
A shift in strategies
Dollar stores may once have had shelves filled with items priced at a dollar, but that is no longer true — and it’s not just because of inflation.
To meet rising demand, they’ve expanded their inventory beyond personal care and craft items to include food, paper products, cleaning supplies and cosmetics. They’ve also added name brands such as Clorox, Glade, Lubriderm and Tide — all selling for more than $1 or even $1.25.
Dollar General has long sold a mix of products but continues to have about 20 percent of inventory priced at $1. Meanwhile, Dollar Tree raised its base price to $1.25 in 2021 and is adding over 300 items this year with prices ranging from $1.50 to $7. The store previously capped prices at $5.
“Dollar Tree just announced their top price would be $7. Even Five Below is now carrying some goods above their prior maximum. I expect this trend to continue as long as inflation is as evident as it has been,” said Dworsky.
What’s still a dollar
A recent check of dollar stores in New York state in late March found a limited stock of $1 items for sale.
Dollar Tree had greeting cards, iodized salt (26 ounces) and a can of Vienna sausages for $1 or less at a store in Levittown. There were plenty of items for $1.25 from wrapping paper to cleaning products.
Family Dollar was a little better. Party goods, wrapping paper, greeting cards, sewing kits, kitchen tools and spices cost $1 at the store in Huntington Station.
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