scorecardDollar Tree is one of the only chains that Amazon can't beat - and it runs the most appalling store we've ever seen
  1. Home
  2. slideshows
  3. miscellaneous
  4. Dollar Tree is one of the only chains that Amazon can't beat - and it runs the most appalling store we've ever seen

Dollar Tree is one of the only chains that Amazon can't beat - and it runs the most appalling store we've ever seen

Dollar Tree is the biggest dollar chain in the US in terms of locations, with more than 14,700 stores.

Dollar Tree is one of the only chains that Amazon can't beat - and it runs the most appalling store we've ever seen

When we visited one of the company's stores in Richmond, Virginia, we found one of the doors at the entrance boarded up with cardboard.

When we visited one of the company

Inside, we found more cardboard. Dozens of boxes lined the aisles.

Inside, we found more cardboard. Dozens of boxes lined the aisles.

The boxes served as displays for misplaced merchandise and abandoned shopping baskets.

The boxes served as displays for misplaced merchandise and abandoned shopping baskets.

They also partially blocked the windows ...

They also partially blocked the windows ...

... and prevented shoppers from navigating around tight corners.

... and prevented shoppers from navigating around tight corners.

But the mess didn't appear to bother anyone at the store, which was busy with at least a dozen customers while we were there.

But the mess didn

The main draw to dollar stores is the low prices.

The main draw to dollar stores is the low prices.

At Dollar Tree, everything costs $1 or less.

At Dollar Tree, everything costs $1 or less.

These prices are generally 20% to 40% below grocery and drug stores, according to Moody’s.

These prices are generally 20% to 40% below grocery and drug stores, according to Moody’s.

Dollar Tree's prices are competitive with online retailers like Amazon as well.

Dollar Tree

Due to the cost of shipping, it's not economical for e-commerce companies to compete with dollar stores on items costing less than $10.

Due to the cost of shipping, it

The stores' value proposition attracts mostly low-income households, but they also have a "growing acceptance by the middle class," according to Moody’s.

The stores

Another major draw for Dollar Tree is convenience.

Another major draw for Dollar Tree is convenience.

The stores are relatively small at about 7,000 square feet, or roughly 15 times smaller than the average Walmart store.

The stores are relatively small at about 7,000 square feet, or roughly 15 times smaller than the average Walmart store.

That makes them easy to shop, especially for quick trips to pick up a small number of items.

That makes them easy to shop, especially for quick trips to pick up a small number of items.

Shoppers also love Dollar Tree for the "treasure hunt" shopping experience its stores provide, according to Moody's.

Shoppers also love Dollar Tree for the "treasure hunt" shopping experience its stores provide, according to Moody

"The treasure hunt shopping that these stores offer can't be replicated by e-commerce," according to Moody’s.

"The treasure hunt shopping that these stores offer can

Dollar Tree’s breadth of constantly changing seasonal merchandise, which accounts for about half of the company’s revenues, means that shoppers can often find something new at the store with each trip.

Dollar Tree’s breadth of constantly changing seasonal merchandise, which accounts for about half of the company’s revenues, means that shoppers can often find something new at the store with each trip.

The total disarray in parts of the store could also contribute to the “treasure hunt” experience, since shoppers have to physically move boxes to access merchandise in some cases.

The total disarray in parts of the store could also contribute to the “treasure hunt” experience, since shoppers have to physically move boxes to access merchandise in some cases.

The business model is working for Dollar Tree.

The business model is working for Dollar Tree.

In its most recent quarter, overall sales grew 13% to $6.4 billion. Same-store sales for the Dollar Tree banner rose nearly 4%, driven by increases in shopper traffic and spending.

In its most recent quarter, overall sales grew 13% to $6.4 billion. Same-store sales for the Dollar Tree banner rose nearly 4%, driven by increases in shopper traffic and spending.

This strength stems in part from the fact that the poorest Americans can't afford to shop anywhere but dollar stores, according to Morgan Stanley analysts.

This strength stems in part from the fact that the poorest Americans can

"We think a 'Goldilocks' scenario is playing out for the Dollar Stores: low end consumer health continues to improve ... while likely not improving so much as to cause significant trade-up," analysts wrote in a note last month.

"We think a

Dollar Tree and its biggest competitor, Dollar General, have recently been adding more consumables — such as food, beverage, and household products — to their stores, according to Moody's.

Dollar Tree and its biggest competitor, Dollar General, have recently been adding more consumables — such as food, beverage, and household products — to their stores, according to Moody

The focus on these categories was evident in the Dollar Tree we visited, as the shelves featuring these products were among the most organized in the entire store.

The focus on these categories was evident in the Dollar Tree we visited, as the shelves featuring these products were among the most organized in the entire store.

Elsewhere, the store was cluttered with abandoned carts and, of course, more boxes.

Elsewhere, the store was cluttered with abandoned carts and, of course, more boxes.

When it was time to check out, we found only one check-out register in operation.

When it was time to check out, we found only one check-out register in operation.

One of the registers was blocked by a tower of boxes.

One of the registers was blocked by a tower of boxes.

Advertisement