Companies in this industry sell a variety of merchandise, including consumables and housewares, through physical retail locations. Major companies include Dollar General and Dollar Tree (both based in the US), along with Dollarama (Canada) and Poundland Group (UK).
Demand is driven by consumer spending, particularly among less affluent consumers, as most companies target the lower- to middle-income demographic. The profitability of individual companies depends on their ability to effectively locate stores and to maximize their revenue per square foot. Large companies have advantages in purchasing and in negotiating lease arrangements. Small companies can compete effectively by locating in a previously untapped market. The US industry is highly concentrated: Dollar General and Dollar Tree together account for more than half of industry revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major product categories are consumables (food items and paper and cleaning products), housewares, seasonal items, and clothing. Consumables account for as much as 75% of some companies' annual sales. Market share of housewares, seasonal items, and apparel varies depending on the store. Store managers generally have the flexibility to order merchandise that is particularly relevant for one location. Some items are automatically reordered at each store.