If you had invested a dollar in Dollar Tree at the beginning of 2008, you would have turned that into more than $3 by December 2010 – a 200% plus return. How did this happen?
First, the consumer is back – whether they be employed or maybe even unemployed. Both appear to be spending money at these dollar stores. These types of stores have been adding national brands and no longer solely offer garage-sale type junk items. Many of these stores have also made renovations to make them more pleasing and shopper-friendly through better merchandising.
So what could go wrong? Possibly the economy continuing to improve which might entice shoppers to revert back to higher-priced competitors. Some shoppers may gladly go back to other stores as these dollar stores still carry a stigma as being only for the economically-disadvantaged. Let’s not forget about Walmart, either. They are a ferocious competitor and they may not be out Walmarted forever.