Dollar & Varriety Stores in The US

Dollar & Variety Stores in the USSeptember 2013 1
WWW.IBISWORLD.COM
Top dollar: Thrifty consumers will enable

growth for dollar stores, amid rising competition
IBISWorld Industry Report 45299
Dollar & Variety Stores in the US

September 2013
Natalie Everett
2 About this Industry
17 International Trade
33 Revenue Volatility
Industry Definition
18 Business Locations
34 Regulation & Policy
Main Activities
Similar Industries
21 Competitive Landscape
Additional Resources
21 Market Share Concentration
35 Key Statistics
21 Key Success Factors
35 Industry Data
21 Cost Structure Benchmarks
35 Annual Change
23 Basis of Competition
35 Key Ratios
3 Industry at a Glance
34 Industry Assistance
4 Industry Performance
24 Barriers to Entry
Executive Summary
25 Industry Globalization
Key External Drivers
Current Performance
26 Major Companies
Industry Outlook
26 Dollar General Corporation
11 Industry Life Cycle
36 Jargon & Glossary
27 Family Dollar Stores Inc.

28 Dollar Tree Stores Inc.
13 Products & Markets
29 Big Lots Inc.
13 Supply Chain
13 Products & Services
32 Operating Conditions
14 Demand Determinants
32 Capital Intensity
15 Major Markets
33 Technology & Systems
www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com
WWW.IBISWORLD.COM
About this Industry

Industry Definition
This industry retails general merchandise

such as apparel, automotive parts, dry
goods, hardware, groceries and home
furnishings. Typically, industry operators
Main Activities
The primary activities of this industry are
retail these goods at discounted prices.

The industry does not include
department stores, warehouse clubs or
grocery stores.
Retailing apparel at discount prices

Retailing food at discount prices
Retailing furniture at discount prices
Retailing home goods at discount prices
The major products and services in this industry are

Apparel and accessories
Consumables
Household products
Seasonal and other
Similar Industries
45211 Department Stores in the US

Operators in this industry sell a wide range of products, which include apparel, furniture, appliances,
hardware and cosmetics. Merchandise lines are normally arranged in separate departments.
45291 Warehouse Clubs & Supercenters in the US
Operating via large stores, warehouse clubs, superstores and supercenters retail groceries as well as apparel,
furniture and appliances.
45331 Used Goods Stores in the US
Operators in this industry retail general lines of used merchandise, antiques and secondhand goods.
45411a E-Commerce & Online Auctions in the US
Operators in this industry retail merchandise via the internet. The industry is differentiated by the medium in
which retail is conducted.
45411b Mail Order in the US
Operators in this industry retail goods via catalogs or television programs.
Additional Resources
For additional information on this industry

www.apparelandfootwear.org
American Apparel and Footwear Association
www.nrf.com
National Retail Federation
www.census.gov
US Census Bureau
WWW.IBISWORLD.COM
Dollar & Variety Stores in the US September 2013
Industry at a Glance
Dollar & Variety Stores in 2013
Key Statistics
Snapshot
Revenue
Annual Growth 08-13
Annual Growth 13-18
Profit
Wages
Businesses
$59.8bn 4.8%
2.2%
$5.6bn 10,703
$4.2bn
Per capita disposable income
Revenue vs. employment growth

12
% change
Dollar General
Corporation
29.4%
Family Dollar
Stores Inc. 17.0%
Dollar Tree
Stores Inc. 13.4%
Big Lots Inc.
9.1%
% change
Market Share
3
0
0
2
3
6
Year 05
07
09
Revenue
11
13
15
17
Year
19
06
08
10
12
14
16
18
Employment
SOURCE: WWW.IBISWORLD.COM
p. 26
Products and services segmentation (2013)
8.2%
Per capita disposable

income
14.1%
Poverty rate
Seasonal and other
External competition for

the Dollar Stores industry
National
unemployment rate
Population
14.3%
Time spent on
leisure and sports
63.4%
Household products
Consumables
p. 4
SOURCE:
WWW.IBISWORLD.COM
SOURCE:
WWW.IBISWORLD.COM
Industry Structure
Life Cycle Stage

Revenue Volatility
Capital Intensity
Mature
Low
Medium
Industry Assistance
None
Concentration Level
Medium
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 35
Regulation Level
Technology Change
Barriers to Entry
Industry Globalization
Competition Level
Light
Low
Medium
Low
Medium
WWW.IBISWORLD.COM
Industry Performance
Executive Summary | Key External Drivers | Current Performance

Industry Outlook | Life Cycle Stage
Executive
Summary
The Dollar and Variety Stores industry is

one of the fastest-growing industries in
the retail sector. IBISWorld estimates that
revenue will increase at an average annual
rate of 4.8% to $59.8 billion in the five
years to 2013. The industry has
successfully passed lower prices, on a wide
range of merchandise, down to
consumers, enabling growth. During the
recession, households began to pinch
pennies with both consumer sentiment
and disposable income falling. As a result,
the industry has attracted new value-
Price-conscious
consumers will fuel demand,

though improved incomes will cut into gains
focused, middle-income consumers who
have not traditionally shopped at dollar
and variety stores. From 2012 to 2013,
revenue is expected to grow 3.8%.
With strong, rising sales, the industry
has had rapid expansion in the five years
to 2013. In particular, the industrys major
players, which account for about 69.0% of
the market share, have established new
stores to capture a larger share of
consumers dollars. As such, the number
of industry establishments is estimated to
increase at an average annual rate of 2.6%
to 39,923 in the five years to 2013.

Per capita disposable income is an
important consideration for households,
since it can be spent or saved. During
periods of low disposable income,
households often forgo quality products
in favor of value products, leading to
higher demand for dollar and variety
stores products. Conversely, high
disposable income increases the
propensity of households to freely spend
on high-quality, more expensive products,
causing industry demand to fall.
While depressed spending

conditions have brought in new
customers looking for value-priced
food and sundries, households are
reducing spending on discretionary
items. Consumables generally have
lower prices compared with
nonconsumables, so average industry
profitability has dropped slightly
during the past five years. IBISWorld
estimates that industry profit will
amount to 7.1% of revenue in 2013,
down slightly from 7.4% in 2008.
In the five years to 2018, industry
revenue is expected to increase at an
average annual rate of 2.2% to $66.6
billion, mainly supported by low-income
households (the industrys largest
market). Further, as a result of the
recession, consumers in higher income
brackets became more price-conscious,
providing additional support to the
industry. However, as the economic
recovery gains traction, a portion of
higher-income consumers will likely
reduce their shopping at dollar and
variety stores in favor of their
prerecession habits of visiting discount
department stores. Furthermore,
increasing external competition from
large-format stores, like Walmart, is
expected to limit the industrys growth
over the five years to 2018.
Per capita disposable income is expected

to increase slowly in 2013.
Poverty rate
This industry attracts low-income
households, including those below the
poverty line. These households have
limited income to spend on discretionary
goods. In fact, about 24.0% of the
industrys customers have an annual
gross income of less than $20,000, and
about 55.0% have incomes of less than
$40,000, according to Nielsens 2010
WWW.IBISWORLD.COM
Homescan data. Consequently, a rise in

the number of households below the
poverty line will boost demand for dollar
and variety stores. The poverty rate is
expected to decline in 2013.
External competition for the
Dollar Stores industry
Food and household essentials supplied
by this industry compete with those
offered by large-format retailers such as
Walmart and discount department stores
such as Costco. This competition exists
because these other retailers typically
offer higher-quality products, and
discount department stores offer a wider
range of general merchandise at
discounted prices. External competition
for the Dollar Stores industry is expected
to rise in 2013.
National unemployment rate
The unemployment rate is positively
related to demand for industry products.
When unemployment rises, consumers
will likely pinch pennies and shop at
dollar and variety stores. The rise in
unemployment caused by the Great
Recession led to high demand for this
industry during the past five years, but
the national employment rate is expected

to decrease significantly in 2013, posing a
potential threat to the industry.
Population
Population growth is an important
component of industry growth. As the
population increases, so does the number
of potential industry customers.
Additionally, population growth in
specific regions is an important indicator
of future establishment growth, as the
number of stores is generally related to
an areas population. Population is
expected to increase slowly during 2013.
Time spent on leisure and sports
A decrease in time spent on leisure and
sports reflects a busier lifestyle, which
heightens demand for convenience, and
in turn, demand for dollar and variety
stores. Industry operators have dodged
some competition from discount
department stores and large-format
retailers by establishing many stores in
urban and rural areas, capturing the
dollars of time-poor consumers. Time
spent on leisure and sports is expected to
decrease slowly during 2013, creating a
potential opportunity for the industry.
Poverty rate

4
16
15
14
% change

continued
2
4
Year
13
06
08
10
12
14
16
18
12
Year 05
07
09
11
13
15
17
19
WWW.IBISWORLD.COM
Current
Performance
Slumping economy
aids industry
The Dollar and Variety Stores industry

has thrived during the five years to
2013, largely because of the recession.
During this period, unemployment
soared, disposable income dwindled
and consumer confidence plummeted,
causing many frugal households to
turn to dollar and variety stores for
merchandise at discounted prices.
Because the industry is countercyclical,
these factors have significantly
bolstered industry demand; revenue is
estimated to grow at an average of
4.8% annually to $59.8 billion during
the five years to 2013. Nevertheless,
falling disposable income has led
households to cut back spending on
higher-margin discretionary goods, like
toys, and has redirected their

expenditures toward lower-margin
daily consumables, like food. As a
result, the industrys profit margin has
fallen during the five-year period. In
addition, dollar and variety stores have
faced strong competition from largeformat retail stores and discount
department stores across the country,
which has bogged down sales growth.
Industry demand relies on

unemployment, per capita disposable
income and consumer confidence.
Consumers tend to spend freely on
high-quality goods when the economic
outlook is strong, national
unemployment is low and households
have sufficient income. However, these
healthy economic trends can impede
demand for dollar and variety store
products. The opposite is true when
unemployment is high and consumers
disposable income shrinks, as was the
case in the past five years. In 2009,
unemployment soared to about 9.3%, and
per capita disposable income fell for the
first time in two decades, causing
industry revenue to grow 2.8% in 2009
and 9.5% in 2010. This growth mainly
occurred because of greater acceptance;
households that traditionally shopped at
department stores and specialty shops
began shopping at dollar and variety
stores to save money. To this end, Dollar

General, the largest industry player,
stated in its annual report that its stores
attracted first-time customers who saw
the potential savings and value in dollar
stores during tough economic times.
According to the Bureau of Labor
Statistics, unemployment peaked in
January 2010, reaching a high of 10.6%.
Since then, it has fallen, but at a very
slow rate; unemployment averaged
9.6% in 2010, 9.1% in 2011 and 8.1% in
2012. With heightened unemployment,
there has been limited disposable
income growth and low consumer
confidence. Consequently, cautious
consumers continued visiting dollar
and variety stores throughout the
recession; however, as the economy has
gained traction, fewer households are
expected to shop at dollar stores,
resulting in an estimated lower-growth
rate of 3.8% in 2013.
As
a result of the recession,

many consumers began
shopping at dollar stores to
save money
WWW.IBISWORLD.COM
Changing buying
patterns
As the recession increased visits to

dollar and variety stores, it also caused
consumers to reduce spending on
discretionary items such as small
electronics and apparel. Instead,
consumers have increasingly purchased
daily consumables such as food, paper
products and cleaning supplies at
dollar stores. As a result, operators
have increasingly focused on
consumable products. For instance,
Dollar General added 700 low-price,
private-label brands for consumables
and fresh produce in some stores.
Another major company, Dollar Tree,
introduced frozen and refrigerated
goods. Consequently, sales of
consumables as a percent of industry
Rising competition
In the five years to 2013, the industry

faced strong competition from largeformat retailers like Walmart and
discount department stores like
Costco, which often sell similar or
higher-quality goods than those
offered by dollar and variety stores. In
particular, Walmart has been a major
threat to the industry because it
provides various competing lines of
goods (e.g. groceries), as well as a large
selection of goods for customers to
choose from; it also has a national
scale, which allows it to offer heavily
discounted prices. As such, Walmarts
rapidly growing revenue has increased
its competitiveness and eroded
industry sales.
Nonetheless, industry players have
been able to fend off some competition by
adopting different strategies. Dollar and
variety stores have reduced overhead
costs by keeping bulk purchasing low and
selling items individually, allowing for
revenue rose from 57.3% in 2008 to

63.4% in 2013.
This shift in consumer shopping
patterns has adversely affected
profitability. Consumables typically have
higher purchasing costs because they are
often sourced domestically. Furthermore,
because operators compete for the lowest
prices, with many of them offering all
items for one dollar, they are limited in
their ability to raise price points and pass
down additional costs to end customers.
Consequently, the growing popularity of
consumables has caused profit margins
for dollar and variety stores to fall.
IBISWorld estimates that margins will
fall to about 7.1% of net sales in 2013,
slightly down from 7.4% in 2008.
Stores
are able to remain

competitive by opening
small stores in urban areas
greater cost savings per item and lowering
the need for inventory space. Industry
firms capitalized on this space-saving
tactic by obtaining small, cheap real
estate in urban areas (where Walmart has
a low presence) and in sparsely populated
areas (which are often neglected by other
large-scale retailers). However, Walmart
will soon challenge this strategy. The
discount giant has announced plans to
open additional urban stores in 2013 to
capture a larger consumer base. They also
plan on introducing smaller packaged
goods, which will improve price
perception and undercut dollar and
variety stores. These changes are expected
to heighten direct competition between
Walmart and industry operators.
WWW.IBISWORLD.COM

has expanded rapidly as opportunities
for capturing more customers have
increased. In particular, the number of
establishments is expected to increase
at an average annual rate of 2.6% in
the five years to 2013, to reach 39,923.
This increase in establishments has led
to a need for new personnel over the
Industry
Outlook
In the five years to 2018, IBISWorld

forecasts revenue for the Dollar and
Variety Stores industry to grow at an
annualized rate of 2.2% to $66.6 billion.
The industry is expected to experience
steady demand throughout the period,
driven by low-income consumers who
continue to seek discounts. However,
improving economic conditions will
encourage consumers to seek out higherquality goods, leading some revenue to
flow into department stores and largeformat retailers, rather than into dollar
and variety stores. Furthermore,
competition, especially from Walmart, is
expected to increase, placing a cap on the
industrys growth potential. IBISWorld
projects that revenue will increase 2.2%
from 2013 to 2014, reflecting a lower
growth rate than in the five years to 2013.
Low-income households primarily
drive demand for the Dollar and Variety
Stores industry, since they are the main
consumers of industry products.
According to Nielsens 2010 Homescan
data (latest data available), about 55.0%
of the industrys customers have an
annual gross income of less than
$40,000, and about 24.0% have an
annual gross income of less than
$20,000. These low-income consumers
are drawn to industry operators by low
five-year period. IBISWorld estimates

the number of employees to rise at an
average of 1.0% annually, to 313,832
workers in 2013. With a rising
number of employees, wages are also
set to increase. In the five-year
period, total wages are expected to
increase at an average annual rate of
3.6% to $5.6 billion.
Industry revenue
12
9
% change
Expanding industry
6
3
0
3
Year 05
07
09
11
13
15
17
19
price points, since products sold by dollar

and variety stores are typically priced
from one to $10. In the five years to 2018,
IBISWorld projects that the percentage of
the US population below the poverty line
will decline slightly, from 14.9% in 2013
to 13.5% in 2018, as the economy
improves. Despite this decline, the
remaining low-income households will
continue to steadily drive sales,
contributing to revenue growth during
the period. Also, a portion of the wave of
higher-income consumers who frequent
dollar and variety stores will remain
customers even as disposable income
rises, further driving industry growth.
WWW.IBISWORLD.COM
Improving economy
In the previous five-year period, the

industry achieved growth because the
number of middle-class customers who
shopped at dollar and variety stores
increased as more consumers looked for
ways to save money. In the five years to
2018, as the economic recovery
accelerates, unemployment is anticipated
to slowly return to prerecession levels, and
some consumers will also return to their
prerecession habits. Consumer sentiment
and disposable income are both expected
to increase during this period, as well. As
consumers find themselves with heavier
wallets, some middle-class households will
increase their spending on high-quality,
more expensive items. These renewed
purchases will slowly move revenue from
the Dollar and Variety Stores industry
toward department stores and largeformat retailers, since they traditionally
provide higher-quality products and
superior customer service.
Rising competition
During the five-year period,

competition from discount department
stores is expected to intensify.
Traditionally, dollar and variety stores
have avoided competition from these
stores by providing lower-priced
products and using small store sizes
that add convenience for shoppers.
Further, smaller stores mean that
dollar and variety stores can obtain
cheaper real estate, allowing them to
expand rapidly and enter untapped
markets like inner cities and rural
areas. However, Walmart introduced
smaller-sized stores with lower-priced
products in 2011 to improve price
perceptions. Walmart intends to
continue this trend, with the
introduction of its smaller Walmart
Express stores in 2012 and an
While rising disposable income will

cause the industry to lose some
customers, this trend is also expected to
improve profit margins. During the
recession, many stores experienced a
shift in purchasing patterns, as
households of all incomes cut down on
non-necessity items and purchased
more consumables (with low profit
margins). However, as disposable
income rises, households will likely
increase spending on nonconsumables
like clothing and home products. This
factor will be especially true for lowincome households, since these families
are often unable to afford higher prices
at specialty shops and large-format
retailers. Higher margins of
nonconsumables will bolster industry
profitability over the five years to 2018.
IBISWorld projects that profit margins
will increase from 7.1% of revenue in
2013 to 8.0% in 2018.
As
Walmart starts to offer

smaller products in urban
areas, competition will
increase
increasing number of its Neighborhood
Market grocers, further challenging the
industry. This change will strip dollar
stores of most of their competitive
advantage, providing Walmart with a
competitive edge because of its broad
range of products, including higherquality goods, and its ability to provide
the convenience of one-stop shopping.
This strategy will likely allow Walmart
to capture greater levels of consumer
spending, limiting industry growth.
WWW.IBISWORLD.COM
Industry expansion
Even with rising competition, revenue

and profit margins are forecast to rise for
industry operators. Dollar and variety
stores will likely expand to take on
increased demand. Consequently, the
number of establishments is expected to
increase at an average annual rate of 1.3%
to 42,580 in the five years to 2018. With
a rising number of stores, employment is
also expected to grow by an average of

0.5% per year over the same period.
Because the number of establishments is
forecast to rise at a faster rate than
employment, employees will be expected
to take on more responsibility. As such,
wages are forecast to rise faster than
employment numbers, at 2.9% per year
on average to $6.5 billion in 2018.
WWW.IBISWORLD.COM
The number of enterprises is expected to
increase, heightening competition
Life Cycle Stage
The industry is characterized by a stable market
% Growth in share of economy
The use of technology is limited

and starting to slow
20
Maturity
Quality Growth
Company
consolidation;
level of economic
importance stable
High growth in economic

importance; weaker companies
close down; developed
technology and markets
15
Key Features of a Mature Industry

Revenue grows at same pace as economy
Company numbers stabilize; M&A stage
Established technology & processes
Total market acceptance of product & brand
Rationalization of low margin products & brands
10
Quantity Growth
Many new companies;

minor growth in economic
importance; substantial
technology change
Dollar & Variety Stores
Warehouse Clubs & Supercenters

Department Stores
Sporting Goods Wholesaling
Toy & Craft Supplies Wholesaling
Used Goods Stores
Decline
-5
Shrinking economic
importance
-10
-10
-5
10
15
20
% Growth in number of establishments

WWW.IBISWORLD.COM
Industry Life Cycle

This
industry
is M
ature

in the mature stage of its life cycle,
despite the temporary growth that it
experienced during the recession. During
the 10 years to 2018, industry value
added, which measures the industrys
contribution to GDP, is estimated to
increase at an average annual rate of
3.2%. Dollar and variety stores
experienced a small amount growth in
the five years to 2013, but this growth is
set to taper off in the next five years. In
comparison, domestic GDP is anticipated
to rise an average of 2.1% annually during
the same period. The trends of industry
consolidation, a stable buyer market and
slowing technology changes all depict the
characteristics of a mature industry.
In the 10 years to 2018, the number of
enterprises is expected to increase only
slightly at an annualized 0.1%. Growth of
enterprises to 2012 was primarily in line
with the booming industry; as revenue
rose, supported by households with lower
income, new entrants entered the
industry to capture some of this growth.
However, in the five years to 2018, the
number of new entrants is expected to
decline at an average of 1.1% annually
due to rising competition from largeformat retailers. As the economic
recovery gains traction, consumers with
higher discretionary income will slowly
seek out higher-quality merchandise,
leading to falling demand for cheap
goods sold by industry operators.
Consequently, businesses are expected

make more mergers and acquisitions or
exit the industry.
The industry has an established buyer
market. Households in the lowest income
quintile (i.e. below the poverty line)
comprise the industrys core buyers,
since these households have limited
disposable income. These consumers
utilize dollar and variety stores to save
cash on household goods; however, the
industry experienced temporary growth
in demand from 2009 to 2011 from
outside of this quintile. As the national
unemployment rate rose during these
years, many jobless Americans
experienced a decrease in disposable
income and turned to industry stores for
cheaper goods. The number of these
temporary buyers is expected to slowly
decrease during the next five years as the
economy recovers. By the end of 2018,
the industrys main buyers will return to
their prerecession composition of mainly
the lowest income quintile.
The use of technology has been
limited to the introduction and
implementation of point-of-sale
systems. While these systems have
enabled operators to increase store
efficiency and better manage inventory
in the five years to 2013, further changes
in technology are not expected in five
years to 2018. This slowdown of
technology reflects an industry in a
mature stage of its life cycle.
WWW.IBISWORLD.COM
Products & Markets
Supply Chain | Products & Services | Demand Determinants

Major Markets | International Trade | Business Locations
Supply Chain
KEY BUYING INDUSTRIES

99
Consumers in the US
Low- to middle-income earning households form the dominant consumer group for dollar and
variety stores in the United States.
KEY SELLING INDUSTRIES
Products & Services
42391
Sporting Goods Wholesaling in the US

This industry supplies sporting goods and accessories to dollar and variety stores.
42392
Toy & Craft Supplies Wholesaling in the US

This industry supplies games, toys, fireworks, playing cards, hobby goods and other related
supplies to dollar and variety stores.
42421
Drug, Cosmetic & Toiletry Wholesaling in the US

This industry supplies beauty products and toiletries to dollar and variety stores.
42432
Mens & Boys Apparel Wholesaling in the US

This industry supplies mens and boys clothing and accessories to dollar and variety stores.
42433
Womens & Childrens Apparel Wholesaling in the US

This industry supplies womens, childrens, infants and unisex clothing and accessories to
dollar and variety stores.
42441
Grocery Wholesaling in the US

This industry supplies a general line of groceries to dollar and variety stores.
42449
Soft Drink, Baked Goods & Other Grocery Wholesaling in the US

This industry supplies soft drinks, baked goods and other groceries (e.g. snacks and coffee) to
dollar and variety stores.

offers a range of general merchandise,
which can be separated into four groups:
consumables, home products, apparel and
other miscellaneous goods. In the five years
to 2013, the product market for the industry
has experienced considerable change,
primarily due to the economic downturn
and a shift in consumer spending patterns.
Consumables
Stagnant per capita disposable income and
rising unemployment have led to a severe
slump in American household sentiment
in the five years to 2013. Following the
economic downturn, accelerated job losses
have halted discretionary spending by
households. Instead, households have
focused spending on consumables like
groceries, paper products, cleaning
supplies, health and beauty aids and pet
food. This trend has particularly benefited
the industrys consumables segment, as

food aisle in dollar stores have become
more popular. In 2013, this segment is
estimated to account for about 63.4% of
industry revenue, whereas in 2008, this
category represented about 57.3% of sales.
As consumers become equipped with
higher disposable income in the five years
to 2018, they will increasingly purchase
nonconsumables, ultimately growing that
product segment. However, some
consumers may reduce their spending on
consumables at dollar stores, returning
instead to their prerecession consumer
habits of shopping at conventional grocers.
As a result, this segment is forecast to
account for a smaller share of industry
revenue in 2018.
Household products
Products in this segment include various
durable goods used at home, such as
WWW.IBISWORLD.COM
Products & Markets
Products & Services

continued
Products and services segmentation (2013)
8.2%
14.1%
Seasonal and other
14.3%
Household products
63.4%
Consumables
Total $59.8bn
kitchen supplies, cookware, light bulbs
and small appliances. Declining
disposable income during the recession
caused households to cut back on
unnecessary spending, leading
consumers to hold off on replacing
cookware and small appliances. This
caused the share of home products to
decline as a percentage of revenue. In
2013, this segment is estimated to
represent 14.3% of revenue, compared
to 15.5% of revenue in 2008; further, it
is forecast to fall marginally to 14.0%
in 2018.
Demand
Determinants
department stores such as Walmart

and Target, offering slightly higherquality clothing and trendier apparel
at discounted prices. As consumers
become more confident with the
economy, it is estimated that they will
buy more discretionary products,
including apparel. As a result, this
segment is forecast to account for a
larger share of industry revenue in
2018 than it will in 2013.

This segment, which includes clothes,
shoes and accessories for women, men
and children, is estimated to account
for 8.2% of sales in 2013. During the
past five years, this segments share of
revenue has declined as consumers
cut back on discretionary spending.
Furthermore, this segment has faced
high competition from discount
Seasonal and other

Other miscellaneous goods sold by
this industry include seasonal
decorations, small electronics,
greeting cards, gardening products,
auto supplies and toys. Poor economic
conditions took a toll on this segment
as well, with stagnant disposable
income leading to decreased
consumption of these products. In
2013, this segment is expected to
account for 14.1% of total sales, down
from 2008.
Because of the inexpensive nature of

products offered by the Dollar and
Variety Stores industry, demand is
largely countercyclical, increasing as
economic conditions deteriorate. For

instance, a higher national
unemployment rate, boosts demand for
industry goods because jobless
WWW.IBISWORLD.COM
Products & Markets
Demand
Determinants
continued
consumers have little money for

discretionary purchases and want to save
money on necessities like food and
sundries. Further, the poverty rate is a
reliable indicator of this industrys
success because a rise in low-income
households is highly correlated with
increased industry revenue. This was
exacerbated during the aftermath of the
recession, especially in 2010, as dollar
stores increased food offerings in
response to growing acceptance because
of low disposable incomes.
Demand for discretionary products
sold by operators, such as small
appliances and electronics, is generally
procyclical, but to a less reliable
degree. As the economy recovers, the
national unemployment rate will fall,
resulting in higher household
disposable incomes. However, rather
than increasing the amount spent at
dollar stores, this rise in disposable
income results in some consumers
returning to their prerecession habits,
reducing the frequency of their visits to
dollar stores. Ultimately, this has a
negative effect on revenue.
Industry demand is subject to external
competition, especially from discount
department stores such as Walmart and
Target. There is little differentiation

between products sold by industry
operators and those offered by external
competitors as they both retail a general
line of merchandise that includes
national brands and private-label brands
at discounted prices. Therefore, when
these discount department stores offer
lower prices with various price
promotions, consumer spending can
shift away from dollar and variety stores.
Also, discount department stores
generally offer a broader range of
products, providing customers with a
larger selection of items.
The need for convenience in the
United States is another demand
determinant in the Dollar and Variety
Stores industry. Operators aim to
provide consumers with a basic store
layout that helps them locate and make
purchases in the least amount of time.
A location that is easy to access and
typically remote from alternative food
and merchandise retailers is also
essential. Time-sensitive shoppers
shop at these stores for location
convenience, extended operating
hours, one-stop shopping, grab-and-go
food service, variety of merchandise
and fast transactions.
Major Markets
According to data from the US

Census Bureau, households
dominate this industrys market,
accounting for an estimated 95.0%
of revenue. Within the household
segment, there are five main markets
separated by income: consumers
earning less than $30,000,
consumers that earn $30,000 to
$49,999, and consumers that earn
more than $50,000. Since goods
sold by dollar and variety stores are
generally inexpensive, the market
distribution is skewed toward those
with lower incomes.
Penny-pinching consumers
Consumers who earn less than $30,000
will make up the largest market in 2013,
representing about half of industry
revenue. The industry retails a wide
range of products at lower prices than
supermarkets and discount department
stores; as such, operators have
capitalized on this frugal market. In the
five years to 2013, however, this
segments share of revenue has declined
in line with the economic downturn. As
consumers in this category faced lower
disposable incomes due to high
unemployment, they have been forced to
WWW.IBISWORLD.COM
Products & Markets
Major Markets
continued
Major market segmentation (2013)
13.5%
5.0%
Other
Consumers with incomes from

$50,000 and over
51.5%
30.0%

$29,999 or under

$30,000 to $49,999
Total $59.8bn
cut back on discretionary spending.
These cutbacks include lower spending
at dollar and variety stores (e.g.
spending on small appliances,
electronics and seasonal decorations
sold by industry operators). Instead,
consumers in this market have focused
their expenditures on daily
consumables, such as food, snacks,
paper products and cleaning supplies.
In the five years to 2018, this
segments share of revenue is expected to
further decline. According to the New
York Post, Walmart is expected to
introduce more products in smaller units
that have lower prices. Consequently, this
activity will likely allow the retail giant to
capture more of this segments dollar,
leading to lower market share for the
Dollar and Variety Stores industry.
Middle-class consumers
Consumers that earn $30,000 to
$49,999 are estimated to make up the
second-largest market in 2013,
accounting for 30.0% of total industry
revenue. In the past five years, this
segments share of revenue has increased
as more middle-class customers began
shopping at dollar and variety stores to
take advantage of discounted prices. To
this end, Dollar General (a major player
in this industry) stated in its 2009

annual report that it had increasingly
attracted customers who had not
traditionally shopped in its stores.
As the economy improves, consumers
in this market will likely demand higherquality goods as they become equipped
with higher disposable income.
Consequently, this group is expected to
give more of its business to large-format
retailers and specialty stores that operate
outside of this industry in the five years
to 2018, creating a decline in this
segments share of the market. Even still,
this segments share will still be higher
than it was in 2008.
A large part of the reasoning behind
middle-class consumers not frequenting
discount and dollar stores is because of a
perceived stigma attached to them. With
the widespread effects of the recession,
some of the negative sentiment toward
these stores diminished. In addition,
industry firms are giving stores facelifts
in the form of better lighting, wider
product offerings and cleaner
environments, in hopes to further reduce
any perceived stigma. For example,
major player Dollar General (along with
several other operators) launched a fresh
produce line that it expects will draw in
additional customers. This will also allow
WWW.IBISWORLD.COM
Products & Markets
Major Markets
continued
dollar stores with fresh produce to

increase competition with supermarkets.
Consumers with incomes over $50,000
Consumers with incomes over $50,000
are less frequent shoppers of dollar and
variety stores. Consumers in this segment
typically place a higher emphasis on
quality of merchandise, while operators
typically focus on value-oriented
products. Consequently, items purchased
by this group are typically limited to
products that offer similar quality to
pricier options, such as gift bags or
stationary, resulting in a low segment
market share. In 2013, this market is
estimated to account for only 13.5% of
International Trade
Dollar and variety stores do not directly

import and export merchandise; rather,
they stock items that have been sourced
from international locations. Analysis
indicates that a significant share of
goods stocked by operators is imported
industry revenue. IBISWorld expects that

more consumers in this segment are
shopping at dollar and variety stores than
in 2008; however, this group did not shift
to these stores as much as other segments
did, so it will account for a smaller share
of industry revenue in 2013.
Other
The industry also sells to a number
of other markets including
businesses and building contractors;
however, dollar and variety stores
are not main suppliers to these
markets. In 2013, about 5.0% of
industry sales will be generated
through this segment.
from global markets, particularly

China, taking advantage of low
purchasing costs. The majority of
imported merchandise is
nonperishable, including clothing and
small electronics.
WWW.IBISWORLD.COM
Products & Markets

Business Locations 2013
West
New
England
AK
0.2
Great
Lakes
WA
ND
MT
0.9
Rocky
Mountains
ID
OR
0.6
West NV
0.4
1.4
SD
0.3
WY
0.5
MN
0.2
0.2
Plains
CO
0.6
2.2
1.0
4.4
KY
5.8
OK
1.8
AZ
NM
1.5
0.7
Southwest
TX
8.8
HI
0.2
Additional States (as marked on map)

1 VT
2 NH
3 MA
4 RI
5 CT
6 NJ
7 DE
8 MD
0.3
0.7
0.3
2.2
1.4
0.3
NC
4.4
SC
Southeast
MS
AL
3.1
2.7
GA
4.2
2.3
LA
2.5
FL
5.2
Revenue (%)
0.3
1.4
1.7
1.2
TN
AR
WV VA
2.8
3.0
CA
West
OH
2.3
MO
KS
1.1
2.5
3.7
4.4
IN
IL
0.7
UT
PA
3.7
1.2
0.6
1 2
3
NY
6.1
5 4
MI
1.6
IA
NE
0.2
WI
ME
MidAtlantic
9 DC
0.1
Less than 3%
3% to less than 10%
10% to less than 20%
20% or more
WWW.IBISWORLD.COM
Products & Markets
Southeast
In 2013, IBISWorld estimates that the
Southeast region will account for 35.9% of
industry establishments. In most retail
industries, the establishment share
correlates closely with population;
however, there are a number of divergent
trends among some key regions for this
industry. In 2013, data sourced from the
US Census Bureau suggests that the
Southeast region will account for 25.4% of
the population. The 10 percentage point
difference between revenue and
population share is significant, reflecting
the regions status of having the lowest
average per capita personal income level in
the United States. Because the industry
targets households with lower incomes,
many establishments are concentrated in
this region. Louisiana, Mississippi and
North Carolina have a higher concentration
of industry establishments because they
have some of the lowest average per capita
income levels in the United States.
Great Lakes
Great Lakes region will account for 15.8%
Distribution of revenue vs. population
of industry establishments. The regions

establishment share will correlate closely
with a population share of 15.0%, though
the region will have an average personal
income level below that of the national
average. About 28.0% of regional revenue
will be derived from Ohio, which accounts
for about 24.9% of the regional population.
Mid-Atlantic
Mid-Atlantic region will account for
14.3% of industry establishments. The
region is expected to have a population
share of about 15.6%, implying that there
will be fewer establishments per capita
relative to the national average. This
characteristic can be attributed to the fact
that this region has the second highest
level of average per capita personal
income in the United States, behind the
New England region.
Southwest
IBISWorld estimates that the Southwest
region will account for 13.0% of industry
establishments in 2013. Similar to the
Southeast region, there will be a higher
Revenue
Revenue
Population
Establishments
Southwest
Southeast
West
Southwest
Southeast
Rocky Mountains
Plains
0
New England
0
Mid-Atlantic
10
Great Lakes
10
Rocky Mountains
20
Plains
20
New England
30
Mid-Atlantic
30
40
Great Lakes
Distribution of revenue vs. establishments
40
West
Business Locations
WWW.IBISWORLD.COM
Products & Markets
Business Locations
continued
number of establishments per capita

relative to the national average, as this
region is expected to make up 12.1% of the
total population. Data from the Bureau of
Economic Analysis suggests that this

region has the second lowest average per
capita personal income, which is this
industrys key market segment.
WWW.IBISWORLD.COM
21
Competitive Landscape
Market Share Concentration | Key Success Factors | Cost Structure Benchmarks

Basis of Competition | Barriers to Entry | Industry Globalization
Market Share
Concentration
Level
Concentration in this
industry is M
edium
Key Success Factors

IBISWorld
identifies
250 Key Success
Factors for a
business. The most
important for this
industry are:
Cost Structure
Benchmarks

exhibits medium concentration, with the
top four players accounting for 69.0% of
revenue. While the industry is
concentrated at the top, the remaining
share of the market is mainly composed
of small- to medium-size players catering
to local demand. IBISWorld estimates
that more than 10,742 firms will actively
compete for the remaining 30.8% of the
market in 2013.
Industry concentration has risen in the
five years to 2013. In 2008, the same top
four players, Dollar General, Family

Dollar Stores, Dollar Tree Stores and Big
Lots, accounted for about 60.4% of the
total revenue. This growth of major
players has been driven mainly by rapid
store expansion; on average, these
players have expanded their locations at
an average annual rate of 2.5% during the
five-year period. By adding new stores,
these major players have capitalized on
urban and rural markets, which their
large-scale competitors, such as Walmart,
have difficulty reaching.
Ability to control stock on hand

Operators need to have stringent
stock control measures. They must
ensure that popular items are
reordered, low selling stock is
disposed of and sufficient product
lines are available.
ensure that pricing is competitive and

represents value to consumers.
Effective product promotion

Successful players will drive revenue
growth through effective advertising
and marketing initiatives.
Use of high volume/low margin strategy

The industry sells items at low price
points. Thus, enterprises need to sell a
higher volume of products to generate
above average industry returns.
Ensuring pricing policy is appropriate

The major basis of competition in this
industry is price, so players must
Having a wide and expanding

product range
Successful operators offer goods that
include home decor, food and sometimes
even pharmaceuticals and tobacco products.
Greater variety leads to higher sales, and
depending on the product mix, higher profit.
Profit
Profit margins vary between dollar and
variety stores. Since larger firms can
generally achieve cost savings through
bulk purchases, they are able to enjoy
higher profit margins. In the five years to
2013, changes in consumer spending
patterns have impaired average industry
profitability. Following the economic
downturn and the subsequent decline in
disposable income, many households
were forced to cut back on their
discretionary spending. Instead,
consumers focused their spending on
daily consumables such as food, snacks,

paper products and cleaning supplies at
dollar and variety stores. However,
because consumables are typically
sourced domestically and have higher
purchasing costs, their rising popularity
led to falling profit margins.
IBISWorld estimates that industry
operators will obtain profit (earnings
before interest and taxes) equivalent to
7.1% of revenue in 2013, slightly down
from 7.4% in 2008. While the four major
industry companies can achieve doubledigit profit figures, smaller companies
WWW.IBISWORLD.COM
22
typically do not have the company size

necessary to leverage lower purchasing
costs. As a result, the majority of smaller
companies are expected to achieve profit
margins in the 3.0% range in 2013. As
consumers become armed with higher
disposable income to spend on
discretionary nonconsumables in the five
years to 2018, profit will rise to about
8.0% of industry revenue.
Purchase cost
Purchase costs are expected to remain
the single largest expense for the industry
in 2013, accounting for about 69.2% of
total sales. This factor is typical of retail
industries, as stores must obtain enough
stock to retail to consumers. This figure
has decreased slightly in the past five
years, from 72.2% of industry revenue in
2008, as the aforementioned popularity
of consumables has led to lower
purchasing costs. In addition, there has
been an increasing volume of inexpensive

nonconsumable imports from Asian
countries, particularly from China.
Furthermore, abolishment of quotas on
selected industry products, including
apparel, in 2006 and 2008, has slowed
the purchases growing share of revenue.
Wages
moderately labor intensive, since it relies
on employees for daily operations.
Operations include customer service,
maintenance of store displays and
inventory checks. In addition, key
industry players often employ seasonal
buying teams to successfully buy offseason merchandise for future sales.
IBISWorld estimates that in 2013, wage
costs will account for 9.3% of revenue
(down from 9.8% in 2008), marking the
second-largest expense for the industry.
Major industry firms are hiring
Sector vs. Industry Costs

Average Costs of
all Industries in
sector (2013)
100
Industry Costs
(2013)
3.7
9.5
7.1
9.3
74.1
69.2
Profit
Wages
Purchases
Depreciation
Marketing
Rent & Utilities
Other
80
Percentage of revenue
Cost Structure
Benchmarks
continued
60
40
20
1.4
3.0
0
6.2
2.2
1.2
3.4
9.3
0.5
WWW.IBISWORLD.COM
23
Cost Structure
Benchmarks
continued
employees at a faster rate than smaller

companies, in an effort to improve store
experience. However, as a whole,
industry revenue is expected to grow
slower than wages in the five years to
2018, giving this segment a larger share.
Rent and utilities
Players in this industry require a physical
location in order to operate their
business. As such, rent costs include
leases paid on store premises. IBISWorld
estimate that rent costs have experienced
a modest rise in recent years due to rapid
expansion of new stores. In fact, the top
four players have added new stores at an
average annual rate of 2.5% in the five
years to 2013, in order to capture more of
the consumers dollars. However, some
stores like Dollar General have sought to
lower operating costs by establishing
stores in low-population communities
where real estate and rent are cheaper.
Furthermore, analysis suggests that rent
costs have risen slower than revenue,
leading to a decreasing share of revenue
in the five years to 2013. As a result, rent
and utilities costs are estimated to
account for 3.4% of revenue in 2013,
down from 3.7% in 2008. Similarly, in
the five years to 2018, revenue is forecast
to rise at a faster rate than the number of
Basis of Competition
Level & Trend
ompetition
C
in
this industry is
Mediumand the
trend is S
teady
Internal competition
Price is the strongest basis for
competition within the industry because
these stores are known for their value
offerings. Price has become more
important in the five years to 2013, as the
economic downturn led to less disposable
income to spend on industry goods.
Nevertheless, the perceived price of
products, rather than actual savings on
products, may be more important to
industry operators because the industrys
main market is composed of low-income
households that do not have much
establishments, giving rent and utilities a

smaller share of industry revenue.
Depreciation
Depreciation costs are estimated to make
up 1.2% of industry revenue in 2013.
Depreciable assets include computer
inventory systems, cash registers and
other point-of-sale computer systems.
This cost is estimated to have remained
relatively stable in the five years to 2013
and is forecast to remain flat during the
five years to 2018 because stores do not
have the need to replace assets or install
new equipment.
Other
Industry operators also incur a variety
of other expenses, including
administrative, insurance, security and
advertising costs. While most of these
costs remain unchanged, marketing and
advertising have increased during the
past five years. As the economic
downturn provided an opportunity for
industry operators, players have
increasingly engaged in print, radio and
television advertising to raise consumer
awareness of brands and highlight low
prices. In 2013, IBISWorld estimates
that marketing costs will make up about
0.5% of industry revenue.
disposable income to spend. While a

bulk-package of goods might provide
higher savings and value, low-income
consumers without much money will
likely purchase a smaller package of the
same product that has a lower price tag
(and potentially less product per dollar).
Operators also compete on the basis of
store location. Stores that are located
near high-traffic will generate higher
sales through added exposure. Also,
locations near prominent shopping
centers reduce the number of trips that
consumers need to make on a shopping
WWW.IBISWORLD.COM
24
Basis of Competition
continued
trip, leading to higher convenience for

consumers and subsequently greater
sales for operators.
External competition
Aside from competing with other dollar
and variety stores, industry operators
also face competition from discount
department stores, such as Walmart and
Target. These stores generally offer the
same or comparable items at discounted
prices, directly competing with the valueoriented business model of dollar stores.
In addition, discount department stores
often provide a larger range of products,
Barriers to Entry
Level & Trend
arriers to Entry
B
in this industry are

Mediumand S
teady
The industry has a medium level of

concentration because of its market
share concentration. The top four
players account for an estimated
69.2% of the available market share in
2013. Therefore, prospective operators
planning to enter this industry may
encounter strong competition from
incumbent firms. However, the
dominance of players fluctuates
depending on the region; as such, the
barriers to entry vary, depending on
where an operator plans to launch
new stores.
Like most retailing industries, the
majority of operational costs are devoted
to the payment of wages rather than to
expenditure on capital equipment such as
fixtures and fittings. Despite this,
operators planning to enter this industry
must consider the capital requirements of
establishing a new store or purchasing an
existing location. IBISWorld estimates
opening a new store ranges in cost from
giving consumers a better selection of

goods to choose from and potentially
providing a one-stop shop, eliminating
the number of store visits per outing.
Dollar and variety stores also face
competition from big-box retailers
and specialty stores such as Costco.
These retailers generally offer
higher-quality alternatives for
products sold by industry operators.
Consequently, when disposable
income is high and consumers are
able to spend more freely on goods,
these stores can attract consumers
away from the industry.
Barriers to Entry checklist

Competition
Concentration
Life Cycle Stage
Capital Intensity
Technology Change
Regulation & Policy
Industry Assistance
Level
Medium
Medium
Mature
Medium
Low
Light
None
$45,000 to $300,000, depending on the

amount of startup inventory, the stores
square footage and its location.
Product differentiation in this industry
is low, subjecting this industry to external
stores that also retail a general line of
merchandise. This competition may be
extremely difficult for new entrants to
overcome, as national retailers have
established relationships with suppliers
to source goods at minimal costs.
WWW.IBISWORLD.COM
Industry
Globalization
Level & Trend
lobalization
G
in this
industry is L owand
the trend is S
teady
Globalization has remained relatively

stable for the Dollar and Variety Stores
industry in the five years to 2012.
Historically, the industry has been
characterized by a large number of small
independent retail stores operating locally
or regionally. Even for large players,
international operations are limited to
Canada. Domestically owned companies
continue to dominate this industry.
However, in terms of
international trade, globalization for
this industry has been increasing
due to the influx of cheap
merchandise imported from Asian
countries, particularly China.
However, the majority of the
products are still sourced from US
manufacturers, keeping trade levels
relatively low.
25
WWW.IBISWORLD.COM
Major Companies
Dollar General Corporation | Family Dollar Stores Inc.

Dollar Tree Stores Inc. | Big Lots Inc. | Other Companies
Major players
(Market share)
Big Lots Inc. 9.1%
Family Dollar Stores Inc.

17.0%
31.1%
Other
Dollar Tree Stores Inc. 13.4%
Player Performance
Dollar General
Corporation
Market share: 29.4%
Dollar General Corporation 29.4%
Founded in Kentucky in 1939, Dollar

General is the largest US discount variety
chain by number of stores. Asset
management firm Kohlberg Kravis Roberts
& Co. (KKR) owns an 85.0% controlling
share of this public company. As with
other industry players, Dollar General
offers a variety of general merchandise at
heavily discounted prices. In addition to
national brands, the company sells a broad
selection of merchandise, including food,
cleaning products and home decor. The
companys products typically sell for $10
or less, and about 25.0% of the companys
stock-keeping units are priced at one
dollar or less. As of March 2013, Dollar
General had 10,557 stores in 40 states,
primarily in the Southeast, Southwest and
Mid-Atlantic regions.
Because of the discounted nature of
Dollar Generals products, the company
competes with discount department
stores, such as Walmart and Target.
However, the company has adopted
several strategies to differentiate its
stores from some of this competition. For
instance, Dollar Generals stores are
generally small in size (each location
averages 7,200 square feet), allowing
them to have low operating costs. In
2012, the company relocated or
remodeled 592 stores and plans to do the
same with another 550 stores in 2013,
focusing expansion efforts in areas with
populations of fewer than 20,000 people.
These areas remain mostly untouched by
large-scale retailers, giving Dollar
General a location advantage.
Financial performance
Dollar General has performed well in
the five years to 2013. The companys
low-priced products attracted many
new customers to its stores when
consumer sentiment fell. The
companys revenue grew at an average
annual rate of 11.0% from 2008 to 2013.
In 2013, IBISWorld estimates that
company revenue will increase 9.9% to
$17.6 billion.
The firms focus on value-conscious
customers drove much of its growth
during the period; as unemployment
soared, consumers sought new ways to
save, including shopping at dollar
stores for household necessities,
particularly food. Dollar General
focused on adding coolers and freezers
to its large-format stores during the
recession, capitalizing on consumers
restricted incomes. In 2008, samestore sales rose 9.0%, while
consumables increased 14.7%. Samestore sales increased again in 2009 to
9.5%, with a 15.3% growth in the
consumables category.
Net income is also expected to have
skyrocketed during the five years to
2013, to an estimated $1.7 billion.
This growth was mainly due to
increased sales volume, enabling the
firm to lower its average costs from
vendors and improve margins. The
companys expansion of private-label
brands also contributed to this
growth, allowing the company to
effectively manage costs.
WWW.IBISWORLD.COM
Major Companies
Player Performance
continued
Dollar General Corporation financial performance

Year
Revenue
($ million)
(% change)
Net Income
($ million)
(% change)
2008
10,457.7
10.1
580.5
135.9
2009
11,796.4
12.8
953.3
64.2
2010
13,035.0
10.5
1,274.1
33.7
2011
14,807.2
13.6
1,490.8
17.0
2012
16,022.1
8.2
1,655.3
11.0
2013*
17,611.1
9.9
1,733.1
4.7
*Estimate
Player Performance
Family Dollar Stores
Inc.
Market share: 17.0%
SOURCE: ANNUAL REPORT AND IBISWORLD
Family Dollar Stores, first established in

1959, is the second largest discount
retailer in America. Operating more than
7,800 stores in 45 states and the District
of Columbia, the company sells a broad
range of merchandise. The corporation
mainly retails goods at prices ranging
from less than one to $10. These products
include household chemicals, paper
products, health and beauty aids, candy,
clothing, towels and linens.
Family Dollar Stores targets low- to
middle-income families; about 56.0% of
its customers earn an annual income of
$40,000 or less, and about 25.0% earn
$20,000 or less. The companys
customers also tend to purchase in small
quantities, as the average customer

transaction was about $10 in 2013.
Family Dollar Stores benefited from the
economic downturn, as many
households with less disposable income
turned to dollar stores during difficult
financial times. As such, the companys
revenue is expected to have increased at
an average annual rate of 7.8% in the
five years to 2013. IBISWorld estimates
that the company generated a 9.0%
revenue increase during 2013 to $10.2
billion, as cautious consumers
continued shopping at dollar stores to
save money.
Family Dollar Stores Inc. financial performance

Revenue
($ million)
(% change)
Net Income
($ million)
(% change)
2007-08
6,983.6
2.2
233.1
-4.0
Year*
2008-09
7,400.6
6.0
291.3
25.0
2009-10
7,866.7
6.3
358.1
22.9
2010-11
8,547.8
8.7
388.5
8.5
2011-12
9,331.0
9.2
688.1
77.1
2012-13**
10,175.4
9.0
670.9
-2.5
*Year end August; **Estimate
WWW.IBISWORLD.COM
Major Companies
Player Performance
continued
The start of the recession in 2008 had

a negative effect on this company.
Revenue fell that year, as consumer
confidence dropped dramatically. As a
result, customers shifted interests from
higher-margin discretionary goods to
low-margin consumable merchandise.
Family Dollar responded in subsequent
years by offering more consumable
merchandise, as consumers became
increasingly interested in buying food at
dollar stores to save money.
Family Dollar Stores has easily

rebounded from its 2008 revenue
decline, with ever-rising revenues.
Profit, too, has blossomed, rising an
average annual rate of 13.1% to $670.9
million in 2013. Initiatives that have
proven successful for Family Dollar
include the expansion of global
sourcing, increased investment in
private brands, a store renovation
program and the continued expansion
of consumables, including tobacco.
Player Performance
Dollar Tree Stores revenue comes from a

network of 4,351 stores under the names
of Dollar Tree, Deal$ and Dollar Bills.
The company is the largest discount
variety store operator that primarily
offers merchandise at the fixed price of
$1, which sets the companys stores apart
from other major players in the industry.
However, in terms of products, there is
little differentiation between Dollar Tree
and other players. Stores retail a range of
consumable merchandise such as candy,
food, health and beauty care products, as
well as durables and seasonal goods, such
as apparel, toys and decorations all for
one dollar. A small number of stores sell
merchandise for more than a dollar,
allowing the company to benefit from
higher margins on certain merchandise.
Financial Performance
In the five years to 2013, Dollar Trees
revenue is expected to have increased at
an average annual rate of 11.6% to $8.0
billion. As with other value stores in the
industry, this growth has been a result
of poor economic conditions that
attracted value-conscious customers.
Company revenue is expected to have
risen 8.5% in 2013 and grown 11.5% in
2012, largely due to the opening of
more than 500 stores nationally. Dollar
Tree has been opening stores regularly
throughout the past five years. The
company also attributes strong growth
to a rollout of consumables, particularly
frozen and refrigerated merchandise, to
more of its stores. Company officials
have said that the addition of these
Dollar Tree Stores

Inc.
Market share: 13.4%
Industry Brand Names
Dollar Bills
Dollar Express
Only One Dollar
Only $One
Dollar Tree Stores Inc. financial performance

Year
Revenue
($ million)
(% change)
Operating Income
($ million)
(% change)
2008
4,644.9
9.5
365.8
10.7
2009
5,231.2
12.6
512.8
40.2
2010
5,882.4
12.4
630.0
22.9
2011
6,630.5
12.7
782.1
24.1
2012
7,394.5
11.5
920.1
17.6
2013*
8,025.4
8.5
1,032.3
12.2
*Estimate
WWW.IBISWORLD.COM
Major Companies
Player Performance
continued
foods increased the number of visits

made by customers. Consequently,
same-store sales increased 5.0% in
2010 and 7.2% in 2009. Net income
also rose $91.0 million in 2009 as a

result of lower fuel and ocean freight
costs, which considerably reduced the
costs of inventory.
Player Performance
Established in 1967, Big Lots is the

largest closeout retailer in the nation; the
company purchases merchandise
resulting from production overruns,
packing changes, discontinued product
lines, liquidation or returns from various
vendors and then retails them to endcustomers at heavily discounted prices.
As with other variety stores, Big Lots also
sells a range of merchandise, such as
food, home decor, appliances, video
games, garden supplies and apparel. The
company separates its products into six
segments: consumables, furniture, home,
play n wear, seasonal, and hardline and
other. As of January 2012, the company
operated 1,533 stores in two countries.
Because the company can acquire
many national brand-name products
and offer them at low prices, Big Lots
appeals to low-income customers and
price-sensitive, middle-class consumers.
This factor has kept the companys sales
afloat during the recession when
consumers heavily cut back on
discretionary spending. However,
because the companys inventory
depends on closeout merchandise,

products offered in its stores vary
considerably. This factor has made the
company much more susceptible to
stores, such as Walmart and Target,
which consistently offer brand-name
products at low prices. To an extent, this
trend has limited the companys growth
in the five years to 2013.
Big Lots current strategy is to focus on
improving three business elements:
merchandising, real estate and cost
structure. Regarding merchandising, the
company improves value and quality
while increasing the number of
recognized brand names in its product
offerings. In terms of real estate, the
company expands its store locations,
though this method fell by the wayside
during the recession.
Big Lots Inc.

Market share: 9.1%
In the five years to 2013, revenue is
expected to have grown more modestly
than its industry competition, at an
average annual rate of 3.3%. Big Lots
Big Lots Inc. financial performance

Year
Revenue
($ million)
(% change)
Operating Income
($ million)
(% change)
2008
4,645.3
-0.2
254.9
7.8
2009
4,726.7
1.8
325.0
27.5
2010
4,952.2
4.8
357.3
9.9
2011
5,202.3
5.0
345.6
-3.3
2012
5,400.1
3.8
298.5
-13.6
2013*
5,452.5
1.0
246.9
-17.3
*Estimate
WWW.IBISWORLD.COM
Major Companies
Player Performance
continued
has struggled to find its footing as its

merchandise competes with products
that can be readily found at comparable
prices at discount department stores; it
does not focus on products in the $10 or
less price range as a majority of the
industrys major players do. As a result,
Big Lots did not see strong revenue
gains during the recession like its
dollar-store competitors. Revenue is
expected to increase 1.0% to $5.5 billion
in 2013. Profit, meanwhile, has suffered,

declining 0.6% to $246.9 million in
2013. Profit is expected to decline
17.3% in 2013 alone. This is partly due
to the store suffering from reduced
spending in its seasonal and hardlines
& toys categories. This reduced
spending is attributed to a cool spring
that delayed spending on hot-weather
products like lawn water toys and
patio umbrellas.
Other Companies
While the industry is highly

concentrated, with the four largest
players accounting for 69.2% of industry
revenue, the rest of the industry is
characterized by a large number of small
and privately-owned variety stores that
typically cater to a local community or
region. In 2012, it was estimated that
there are about 10,746 companies in the
industry, of which about 10,742 firms
share 30.8% of industry revenue. Due to
this fragmented nature, the majority of
industry players do not have a significant
share of the industry.
in 15 states, mostly in the Southeast.

Freds offers brand-name products,
company-brand products and off-brand
products at discounted prices. The
company differentiates itself from other
industry players by including a
pharmacy department in its stores; as of
April 2013, the company had 325
full-service pharmacies operating inside
stores. Further, the company is set apart
from other industry players by its
tobacco sales.
As with many other players, Freds
has also posted positive growth in the
five years to 2013. Revenue is
estimated to have increased at an
average annual rate of 1.9% in the five
years to 2013 to total $2.0 billion. The
retailer performed especially well in
2010 with a 3.0% increase in revenue
and a 2.2% rise in comparable-store
Freds Inc.
Estimated market share: 3.5%

Freds is a chain of discount general
merchandise stores. The company
operates 679 general merchandise
stores plus another 21 franchised stores
Freds Inc. financial performance

Year
Revenue
($ million)
(% change)
Net Income
($ million)
(% change)
2008
2009
2010
2011
2012
2013*
1,798.8
1,788.1
1,841.8
1,924.3
1,983.6
1,980.1
1.0
-0.6
3.0
4.5
3.1
-0.2
16.6
23.6
29.6
30.8
32.5
33.2
55.1
42.2
25.4
4.1
5.5
2.2
*Estimate
SOURCE: ANNUAL REPORT
WWW.IBISWORLD.COM
Major Companies
Other Companies
continued
sales; this growth can be attributed to

the companys long-term strategy to
focus on its five core product
categories: home, celebration goods,
pet products, pharmacy, and paper and
chemical products.
99 Cents Only Stores
Estimated market share: 2.9%

Founded in 1982, 99 Cents Only
Stores is the nations oldest chain
of single-priced general retailers.
The store primarily prices its
merchandise at 99 cents or below.
Today, the firm operates 275 retail
stores, mostly in California with
some stores in Texas, Arizona and
Nevada. In January 2012, 99

Cents Only Stores merged with
Number Holdings Inc. and
Number Merger Sub Inc.
In the five years to fiscal 2014, the
company benefited considerably
from the recession. As consumers
facing low disposable income began
looking for affordable, essential
goods for their families, 99 Cents
Only Stores became an attractive
option. Consequently, revenue is
estimated to have risen at an average
annual rate of 6.8% during the
five-year period. In fiscal 2014, the
company is forecast to generate an
estimated $1.8 billion in total sales.
99 Cents Only Stores financial performance

Year*
Revenue
(% change)
Net Income
(% change)
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14**
1,262.1
1,300.0
1,314.2
1,376.5
1,620.7
1753.9
8.9
3.0
1.1
4.7
17.7
8.2
2.9
8.5
60.4
57.8
68.3
73.9
-71.0
193.1
610.6
-4.3
18.2
8.2
*Year end March; **Estimate

WWW.IBISWORLD.COM
Operating Conditions
Capital Intensity | Technology & Systems | Revenue Volatility

Regulation & Policy | Industry Assistance
Capital Intensity
Level
The level
of capital
intensity is M
edium
IBISWorld estimates that the Dollar and

Variety Stores industry has a mediumlow level of capital intensity. This trend is
similar to other retail industries, which
are generally labor-intensive. In 2013, for
every dollar spent on wages, about $0.13
is estimated to be allocated toward
capital assets.
This category includes expenditure on
physical assets required to operate in
this industry. The level of capital
expenditure is influenced by the size and
number of stores an industry player
operates. Examples of capital costs
include the purchase of fixtures and
fittings (fit-outs) for stores and point-ofsale systems. Expenditures on store
fit-outs has remained fairly stable in
recent years, and these projects are
mainly undertaken when a new

enterprise enters the industry or when
existing stores are refurbished.
Alternatively, expenditure on
technological equipment (e.g. computer
scanning cash registers) has
experienced considerable growth during
the past 10 to 15 years. In its early days,
only larger players undertook such
expenditures, as implementation costs
were high. However, technological
changes have simplified this equipment
and made it more affordable to smaller
industry players.
The cost of a new store for industry
operators can be extensive and
depends largely on the store size, the
products it plans to stock and location.
IBISWorld estimates that the total cost
Tools of the Trade: Growth Strategies for Success

Investment Economy
Recreation, Personal Services,

Health and Education. Firms
benefit from personal wealth so
stable macroeconomic conditions
are imperative. Brand awareness
and niche labor skills are key to
product differentiation.
Information, Communications,
Mining, Finance and Real
Estate. To increase revenue
firms need superior debt
management, a stable
macroeconomic environment
and a sound investment plan.
Capital Intensive
Labor Intensive
New Age Economy
Dollar & Variety

Stores
Toy & Craft Supplies Wholesaling
Used Goods Department
Stores
Traditional Service Economy

Wholesale and Retail. Reliant
on labor rather than capital to
sell goods. Functions cannot
be outsourced therefore firms
must use new technology
or improve staff training to
increase revenue growth.
Stores
Warehouse Clubs & Supercenters

Sporting Goods Wholesaling
Change in Share of the Economy
Old Economy
Agriculture and Manufacturing.
Traded goods can be produced
using cheap labor abroad.
To expand firms must merge
or acquire others to exploit
economies of scale, or specialize
in niche, high-value products.
WWW.IBISWORLD.COM
Capital Intensity
continued
Technology
& Systems
Level
The level
of
Technology
Change is L ow
Revenue Volatility
Level
The level
of
Volatility is L ow
of a new store typically ranges from

$50,000 to $300,000.
On top of these capital expenses,
there is also the cost of hiring
employees. Duties undertaken by
employees include customer service and
advice, processing consumer purchases,
arranging store layout and replenishing
store shelves. Wage costs are influenced
by the number of people employed, the
relative wage rate and the companys
trading hours. Unlike capital costs,
which can vary, labor costs are an
integral and annual expenditure
incurred by industry players.
Capital intensity
Capital units per labor unit

0.5
0.4
0.3
0.2
0.1
0.0
Economy
Retail Trade
Dollar & Variety

Stores
Dotted line shows a high level of capital intensity

Most operators in the general retail sector

have installed point-of-sale (POS) systems
across their network of stores. POS
systems maintain online records of all
transactions and allow management to
track performance by region, store and
individual sales. From the information
gathered, in-store inventories are
automatically replenished (by the regional
distribution centers in most cases). The
data is also used to assist with product
buying decisions. When this technology
was first introduced, small businesses
hesitated to implement POS systems due
to the associated high costs and
installation prices. However, recent

advances have made the standard POS
system affordable even for the smallest
of businesses.
Many of the larger industry participants
have invested heavily in advanced POS
systems throughout the past 10 years so
that analysis of sales by store, product and
transaction sizes, and transaction values
can be conducted. This factor helps to
determine an effective stock mix, which
may differ for each store. This has
implications in inventory levels, which in
turn affect markdowns and margins on
items sold.
Changes in consumer confidence in the

economy, unemployment and per capita
disposable income drive consumer
spending on goods supplied by this
industry. As a result, revenue volatility
has been at a low level that is
uncharacteristic of the retail sector.
Since the industry typically retails
products with low prices, sales reach
higher levels during tough economic
times. Competition among industry
operators and retailers such as discount
department stores and big-box retailers
also influence revenue prospects for this

industry. In recent years, the industry has
benefitted considerably from the
economic downturn. As high
unemployment and low disposable
income forced households to pinch
pennies, demand for low-priced items
supplied by this industry significantly
increased. However, competition from
discount department stores captured
some of this skyrocketing demand.
Discount department stores offer similar
merchandise at discounted prices and
WWW.IBISWORLD.COM
A higher level of revenue

volatility implies greater
industry risk. Volatility can
negatively affect long-term
strategic decisions, such as
the time frame for capital
investment.
When a firm makes poor
investment decisions it
may face underutilized
capacity if demand
suddenly falls, or capacity
constraints if it rises
quickly.
Volatility vs Growth
1000
Revenue volatility* (%)
Revenue Volatility
continued
Hazardous
Rollercoaster
100
10
Dollar & Variety Stores

1
0.1
Stagnant
30
10
Blue Chip
10
30
50
70
Five year annualized revenue growth (%)

* Axis is in logarithmic scale
Regulation & Policy

Level & Trend
he level of
T
Regulation is
Lightand the
trend is S
teady
Industry Assistance
Level & Trend
he level of
T
Industry Assistance
is N
oneand the
trend is S
teady
have effectively attracted some

consumers away from the industry.
This has kept industry revenue from

expanding more rapidly.
There are no industry-specific regulations

that apply to dollar and variety stores;
however, few regulations govern the
retail sector. Regulations relevant to this
sector are generally covered at the state
level. States have enacted their own
antitrust laws to ensure that the general
public is provided with the best prices,
quality and choice. Companies must
comply with the Fair Labor Standards

Act and various state laws governing
matters such as minimum wage, overtime
and other working conditions. Store
owners must also comply with the
provisions of the Americans with
Disabilities Act of 1990, as amended,
which generally requires that stores are
accessible to customers with disabilities.
This industry is subject to a number of

import tariff duties. For example, the
tariff rate for apparel can range from
0.0% to 25.0%; footwear from 1.0% to
10%; glassware from 3.6% to 26.0%;
tableware from 3.2% to 16.0%;
sporting equipment and accessories
from 0.3% to 5.6%; and hardware
from 0.4% to 9.0%.
While tariffs apply to goods
supplied by this industry, they do little
at the retail level. Retailers purchase

goods from importers and wholesalers
after the tariff has been applied.
However, a change in the tariff of a
particular good can determine where
the good is purchased from and may
also alter the purchase price. A decline
in tariff rates may result in falling
purchasing costs, which can be passed
onto consumers. This factor allows
retailers to remain competitive.
WWW.IBISWORLD.COM
Key Statistics
Industry Data
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Sector Rank
Economy Rank
Revenue
($m)
45,273.9
46,364.8
47,039.6
46,988.3
47,287.4
48,629.4
53,265.4
55,566.5
57,644.7
59,840.9
61,127.5
62,698.5
64,034.0
65,199.4
66,605.6
20/140
148/1309
Annual Change
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Sector Rank
Economy Rank
Revenue
(%)
2.4
1.5
-0.1
0.6
2.8
9.5
4.3
3.7
3.8
2.2
2.6
2.1
1.8
2.2
62/140
480/1309
Key Ratios
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Sector Rank
Economy Rank
IVA/Revenue
(%)
18.94
18.58
18.38
18.25
18.53
18.48
17.96
17.22
17.71
17.66
17.75
17.82
17.92
17.95
17.99
68/140
1086/1309
Industry
Value Added
($m)
8,574.4
8,616.1
8,647.5
8,576.3
8,764.3
8,986.6
9,568.6
9,568.7
10,211.1
10,567.0
10,853.0
11,176.0
11,472.5
11,704.8
11,985.4
19/140
246/1309
Establishments
31,787
33,199
33,535
34,063
35,031
36,316
37,235
38,042
39,089
39,923
40,691
41,307
41,639
42,058
42,580
35/140
177/1308
Enterprises Employment
10,517
291,595
10,632
301,725
10,275
305,104
10,003
294,783
10,050
298,615
10,387
303,990
10,596
307,638
10,746
309,484
10,746
311,960
10,703
313,832
10,629
315,715
10,535
317,609
10,380
318,562
10,247
320,155
10,133
321,788
56/140
20/140
293/1308
122/1309
Exports
---------------N/A
N/A
Industry
Value Added
(%)
0.5
0.4
-0.8
2.2
2.5
6.5
0.0
6.7
3.5
2.7
3.0
2.7
2.0
2.4
75/140
592/1309
Establishments
(%)
4.4
1.0
1.6
2.8
3.7
2.5
2.2
2.8
2.1
1.9
1.5
0.8
1.0
1.2
66/140
430/1308
Enterprises Employment
(%)
(%)
1.1
3.5
-3.4
1.1
-2.6
-3.4
0.5
1.3
3.4
1.8
2.0
1.2
1.4
0.6
0.0
0.8
-0.4
0.6
-0.7
0.6
-0.9
0.6
-1.5
0.3
-1.3
0.5
-1.1
0.5
112/140
111/140
920/1308
848/1309
Exports
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Imports/
Demand
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Figures are inflation-adjusted 2013 dollars. Rank refers to 2013 data.
Exports/
Revenue
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Revenue per
Employee
($000)
155.26
153.67
154.18
159.40
158.36
159.97
173.14
179.55
184.78
190.68
193.62
197.41
201.01
203.65
206.99
81/140
823/1309
Imports
---------------N/A
N/A
Wages
($m)
4,726.1
4,675.1
4,649.1
4,582.3
4,697.6
4,901.7
5,094.4
5,258.3
5,426.6
5,600.2
5,779.4
5,972.0
6,157.7
6,293.2
6,457.1
22/140
255/1309
Domestic
Demand
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Per capita
disposable income
($)
31,184
31,318
32,303
32,749
33,229
32,020
32,335
32,529
32,788
32,897
33,917
34,969
35,681
36,453
37,249
N/A
N/A
Imports
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Wages
(%)
-1.1
-0.6
-1.4
2.5
4.3
3.9
3.2
3.2
3.2
3.2
3.3
3.1
2.2
2.6
59/140
458/1309
Domestic
Demand
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Per capita
disposable income
(%)
0.4
3.1
1.4
1.5
-3.6
1.0
0.6
0.8
0.3
3.1
3.1
2.0
2.2
2.2
N/A
N/A
Wages/Revenue
(%)
10.44
10.08
9.88
9.75
9.93
10.08
9.56
9.46
9.41
9.36
9.45
9.52
9.62
9.65
9.69
89/140
1048/1309
Employees
per Est.
9.17
9.09
9.10
8.65
8.52
8.37
8.26
8.14
7.98
7.86
7.76
7.69
7.65
7.61
7.56
32/140
849/1308
Average Wage
($)
16,207.75
15,494.57
15,237.75
15,544.65
15,731.29
16,124.54
16,559.72
16,990.54
17,395.18
17,844.58
18,305.75
18,802.99
19,329.68
19,656.73
20,066.32
109/140
1196/1309
Share of the
Economy
(%)
0.07
0.07
0.07
0.06
0.07
0.07
0.07
0.07
0.08
0.08
0.08
0.08
0.08
0.07
0.07
19/140
246/1309
WWW.IBISWORLD.COM
Jargon & Glossary
Industry Jargon
BIG-BOX STOREA retail store that is differentiated by

its sheer size and large range of products, including
electronics, households goods and other consumer
products.
POINT-OF-SALE (POS)A system used at checkout in

retail stores using computers and cash registers to
capture transaction data at the time and place of sale.
CONSUMABLESProducts intended to be used within a

specific time frame. Examples include food, snacks and
beverages.
SAME-STORE SALESA retail measure used to assess

the true performance of retail outlets by taking out the
effect of new store openings and only looking at sales
growth of existing stores.
FIT-OUTThe act of refurbishing a stores existing

equipment or replacing it with new equipment.
SOFTLINEProducts made from soft substances (e.g.

cotton), such as apparel or cloth.
HARDLINEProducts made from hard substances (e.g.

plastic or metal) and those generally used in do-ityourself projects (e.g. chemicals or paper products).
IBISWorld Glossary
BARRIERS TO ENTRYHigh barriers to entry mean that

new companies struggle to enter an industry, while low
barriers mean it is easy for new companies to enter an
industry.
CAPITAL INTENSITYCompares the amount of money
spent on capital (plant, machinery and equipment) with
that spent on labor. IBISWorld uses the ratio of
depreciation to wages as a proxy for capital intensity.
High capital intensity is more than $0.333 of capital to
$1 of labor; medium is $0.125 to $0.333 of capital to $1
of labor; low is less than $0.125 of capital for every $1 of
labor.
CONSTANT PRICESThe dollar figures in the Key
Statistics table, including forecasts, are adjusted for
inflation using the current year (i.e. year published) as
the base year. This removes the impact of changes in
the purchasing power of the dollar, leaving only the
real growth or decline in industry metrics. The inflation
adjustments in IBISWorlds reports are made using the
US Bureau of Economic Analysis implicit GDP price
deflator.
DOMESTIC DEMANDSpending on industry goods and
services within the United States, regardless of their
country of origin. It is derived by adding imports to
industry revenue, and then subtracting exports.
EMPLOYMENTThe number of permanent, part-time,
temporary and seasonal employees, working proprietors,
partners, managers and executives within the industry.
ENTERPRISEA division that is separately managed and
keeps management accounts. Each enterprise consists
of one or more establishments that are under common
ownership or control.
ESTABLISHMENTThe smallest type of accounting unit
within an enterprise, an establishment is a single
physical location where business is conducted or where
services or industrial operations are performed. Multiple
establishments under common control make up an
enterprise.
EXPORTSTotal value of industry goods and services sold
by US companies to customers abroad.
IMPORTSTotal value of industry goods and services

brought in from foreign countries to be sold in the
United States.
INDUSTRY CONCENTRATIONAn indicator of the
dominance of the top four players in an industry.
Concentration is considered high if the top players
account for more than 70% of industry revenue.
Medium is 40% to 70% of industry revenue. Low is less
than 40%.
INDUSTRY REVENUEThe total sales of industry goods
and services (exclusive of excise and sales tax); subsidies
on production; all other operating income from outside
the firm (such as commission income, repair and service
income, and rent, leasing and hiring income); and
capital work done by rental or lease. Receipts from
interest royalties, dividends and the sale of fixed
tangible assets are excluded.
INDUSTRY VALUE ADDED (IVA)The market value of
goods and services produced by the industry minus the
cost of goods and services used in production. IVA is
also described as the industrys contribution to GDP, or
profit plus wages and depreciation.
INTERNATIONAL TRADEThe level of international
trade is determined by ratios of exports to revenue and
imports to domestic demand. For exports/revenue: low is
less than 5%, medium is 5% to 20%, and high is more
than 20%. Imports/domestic demand: low is less than
5%, medium is 5% to 35%, and high is more than
35%.
LIFE CYCLEAll industries go through periods of growth,
maturity and decline. IBISWorld determines an
industrys life cycle by considering its growth rate
(measured by IVA) compared with GDP; the growth rate
of the number of establishments; the amount of change
the industrys products are undergoing; the rate of
technological change; and the level of customer
acceptance of industry products and services.
NONEMPLOYING ESTABLISHMENTBusinesses with
no paid employment or payroll, also known as
nonemployers. These are mostly set up by self-employed
individuals.
WWW.IBISWORLD.COM
Jargon & Glossary
IBISWorld Glossary
continued
PROFITIBISWorld uses earnings before interest and tax

(EBIT) as an indicator of a companys profitability. It is
calculated as revenue minus expenses, excluding
interest and tax.
VOLATILITYThe level of volatility is determined by

averaging the absolute change in revenue in each of the
past five years. Volatility levels: very high is more than
20%; high volatility is 10% to 20%; moderate
volatility is 3% to 10%; and low volatility is less than
3%.
WAGESThe gross total wages and salaries of all
employees in the industry. The cost of benefits is also
included in this figure.
www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com
At IBISWorld we know that industry intelligence

is more than assembling facts
It is combining data with analysis to answer the
questions that successful businesses ask
Identify high growth, emerging & shrinking markets
Arm yourself with the latest industry intelligence
Assess competitive threats from existing & new entrants
Benchmark your performance against the competition
Make speedy market-ready, profit-maximizing decisions
Who is IBISWorld?
We are strategists, analysts, researchers, and marketers. We provide
answers to information-hungry, time-poor businesses. Our goal is to
provide real world answers that matter to your business in our 700 US
industry reports. When tough strategic, budget, sales and marketing
decisions need to be made, our suite of Industry and Risk intelligence
products give you deeply-researched answers quickly.
IBISWorld Membership
IBISWorld offers tailored membership packages to meet your needs.
Disclaimer
This product has been supplied by IBISWorld Inc. (IBISWorld) solely for use
by its authorized licensees strictly in accordance with their license
agreements with IBISWorld. IBISWorld makes no representation to any
other person with regard to the completeness or accuracy of the data or
information contained herein, and it accepts no responsibility and disclaims
all liability (save for liability which cannot be lawfully disclaimed) for loss or
damage whatsoever suffered or incurred by any other person resulting from
the use of, or reliance upon, the data or information contained herein.
Copyright in this publication is owned by IBISWorld Inc. The publication is
sold on the basis that the purchaser agrees not to copy the material
contained within it for other than the purchasers own purposes. In the event
that the purchaser uses or quotes from the material in this publication in
papers, reports, or opinions prepared for any other person it is agreed that
it will be sourced to: IBISWorld Inc.
Copyright 2013 IBISWorld Inc

Dollar & Varriety Stores in The US

Transféré par

Informations du document

Titre original

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

Dollar & Varriety Stores in The US

Transféré par

Droits d'auteur :

Formats disponibles

Dollar & Variety Stores in the USSeptember 2013 1

Top dollar: Thrifty consumers will enable

IBISWorld Industry Report 45299

Dollar & Variety Stores in the US

2 About this Industry

34 Regulation & Policy

21 Market Share Concentration

21 Key Success Factors

21 Cost Structure Benchmarks

Key External Drivers

26 Dollar General Corporation

11 Industry Life Cycle

36 Jargon & Glossary

27 Family Dollar Stores Inc.

13 Products & Markets

29 Big Lots Inc.

33 Technology & Systems

www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com

Dollar & Variety Stores in the USSeptember 2013 2

About this Industry

This industry retails general merchandise

The primary activities of this industry are

retail these goods at discounted prices.

Retailing apparel at discount prices

The major products and services in this industry are

45211 Department Stores in the US

For additional information on this industry

Dollar & Variety Stores in the US September 2013

Annual Growth 08-13

Annual Growth 13-18

Per capita disposable income

Revenue vs. employment growth

Products and services segmentation (2013)

Key External Drivers

Apparel and accessories

Per capita disposable

Seasonal and other

External competition for

Life Cycle Stage

Dollar & Variety Stores in the USSeptember 2013 4

Executive Summary | Key External Drivers | Current Performance

The Dollar and Variety Stores industry is

consumers will fuel demand,

Key External Drivers

Per capita disposable income

While depressed spending

Per capita disposable income is expected

Dollar & Variety Stores in the USSeptember 2013 5

Homescan data. Consequently, a rise in

the national employment rate is expected

Per capita disposable income

Key External Drivers

Dollar & Variety Stores in the USSeptember 2013 6

The Dollar and Variety Stores industry

toys, and has redirected their

Industry demand relies on

stores to save money. To this end, Dollar

a result of the recession,

Dollar & Variety Stores in the USSeptember 2013 7

As the recession increased visits to

In the five years to 2013, the industry

revenue rose from 57.3% in 2008 to

are able to remain