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The Cleveland Plain Dealer reports on how dollar stores are expanding the markets they serve and the products they carry. “Instead of catering almost solely to households with incomes of $30,000 or less, they increasingly are reaching for SUV-driving soccer moms and graduate students,” the paper writes. “They have been taking over the spiritual space left by the long-gone five-and-dime stores, offering a dizzying variety of merchandise at low prices.”

This increased acceptability of the format to upscale households is reflected in the fact that a recent ACNielsen survey showed that almost half of households with annual income of more than $70,000 had shopped at a dollar store during the past year. These shoppers are being attracted by an expanded array of brand merchandise and definable bargains in a convenient format.
KC's View:
Not mentioned in the story – but obviously relevant – is the recent report that Dollar General will ramp up the expansion of its Dollar General Market format, opening at least 30 of them this year. The units are twice the size of an average Dollar General store, and carry an expanded selection of frozen and refrigerated products as well as fresh fruits and vegetables.

The dollar stores are learning from the Costco model, which has long thrived by having strong appeal to affluent consumers. It works because one way that rich people stay rich is by not spending their money when they don’t have to.