Dollar and General Merchandise Stores NAICS 455219

Mar 23, 2026 - Dollar Stores Test New Formats to Drive Growth

• Dollar store operators are evolving formats to drive growth and better target customers, according to recent Chain Store Age reports. Family Dollar plans to pilot an extra small-format store in 2026 to expand into dense urban markets, supporting long-term unit growth beyond 2027, following $13 billion in 2025 revenue and 2.5% same-store sales growth. Meanwhile, Dollar General is introducing a more open, redesigned store layout aimed at increasing browsing and “treasure hunt” behavior, which has already delivered incremental sales lift in test remodels. The company also plans 450 new U.S. stores and up to 4,250 remodels in 2026. Together, these strategies reflect a broader industry shift toward format innovation, such as smaller urban footprints and enhanced in-store experiences, to drive traffic, increase basket size, and sustain growth in a competitive value retail environment.
• The National Retail Federation (NRF) projects US retail sales will grow 4.4% in 2026 to $5.6 trillion, outpacing the 10-year average of 3.6%, reflecting continued consumer resilience despite economic uncertainty. According to NRF, household spending remains a “pillar of economic support,” driven largely by higher-income consumers, while spending remains uneven across income groups. The outlook is supported by income growth, stable labor markets, and unemployment below 4.5%, though job growth is expected to soften. Inflation is projected to remain elevated through midyear before easing, with a portion of retail growth representing real gains rather than price increases. NRF also notes modest near-term support from tax refunds, even as geopolitical tensions and trade policy risks persist. Overall, the forecast signals steady but uneven growth for the US retail industry in 2026.

• US consumer spending growth is expected to slow to about 1.5% in 2026, but the shift toward value shopping is likely to benefit the dollar store industry, according to Moody’s Ratings. As a cooling labor market, slower wage growth and rising costs for essentials pressure household budgets, consumers are increasingly trading down to lower-priced retailers. Moody’s analysts say value-focused retailers are poised to gain market share, a trend already reported by Dollar General and Dollar Tree, which have seen more higher-income shoppers in 2025. Dollar Tree’s long-term multiprice strategy is aimed at capturing this demand. Supporting the cautious outlook, Deloitte data from October shows shoppers across income levels planned to cut holiday spending. While overall spending growth will moderate, Moody’s notes stable unemployment among core middle-aged workers should help sustain traffic at dollar stores.
• Consumer confidence rose modestly (up 2.2 pts) in February but remains well below the 2024 peak, signaling cautious spending, which can be favorable for US dollar stores, according to the Conference Board's Consumer Confidence Index. While expectations improved (up 4.8 pts), current conditions weakened (down 1.8 pts) and concerns about inflation and costs persist. Consumers are shifting toward “cheap thrills and necessary services” and away from discretionary purchases, aligning with value-oriented retail models. Financial outlooks remain mixed, with fewer expecting income declines (12.3%) but overall sentiment still subdued. For dollar stores, this environment supports steady demand as cost-conscious consumers prioritize affordability, though elevated inflation expectations and cautious spending behavior may limit basket size and require continued price competitiveness.