Dollar stores are retailers once known for selling a wide range of household goods for one dollar or less—although in recent years, inflation and rising costs have forced many dollar store chains to use multi-price formats, including some as high as $7. Today, it would be more accurate to call Dollar Tree, for instance, a $1.25 store.
Dollar stores emerged in the mid-20th century, when postwar America was increasingly producing cheap consumer goods. The concept drew on "five and dime" stores, where items were either five or ten cents a piece, as well as retail promotions at other retailers known as "dollar days."
With more than 40,000 stores in the US, the dollar and variety store industry was worth about $119.8B in revenue as of early 2026. These businesses make money by purchasing inventory in bulk, then selling it at a markup. The top dollar store retailers by market share include Dollar Tree, Dollar General, and Family Dollar.
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This forces customers to encounter other, less-necessary items on their way there, leading to impulse buys. This video explains other ways that dollar stores make money while selling extremely cheap products, keeping dollar store profit margins relatively high.
Dollar store retailers experienced significant fiscal gains during the 2010s, which were then accelerated by the COVID-19 pandemic. But in recent years, dollar stores have been closing in large numbers and suffering financial hardship. Experts point to Walmart's strategy of decreasing prices to cater to inflation-fatigued customers, and point out that when Walmart does well financially, dollar stores typically suffer.
Dollar Tree completed its acquisition of Family Dollar for about $9B in 2015. However, in 2025, Dollar Tree sold Family Dollar to private equity firms Brigade Capital Management and Macellum Capital Management for just over $1B after Family Dollar lagged in performance.
It was created by a father and son, Cal Turner Sr. and JL Turner. At the time, no item in the store cost more than one dollar, although that has since changed.
A recent article claims that at Dollar Tree, almost all of the items are $1.25, although inventory seems more limited. At Family Dollar and Dollar General, prices tend to be slightly higher, though they often carry name brands.
Recent reports suggest that dollar stores regularly practice 'shrinkflation,' the practice of making products smaller while keeping the price the same or even raising it.
A typical Dollar Tree is roughly 8,000 to 12,000 square feet. That's about one-eighteenth of the average Walmart store. Some experts suggest Dollar Tree keeps its stores smaller intentionally, so that customers can see all the products faster, increasing their likelihood of seeing something they want to buy.
Dollar Tree stores have been opening in wealthier areas in recent months, with its 9,000th store opening in 2025 within a few miles of a Louis Vuitton store and a Porsche dealership. A recent survey found that 19% of the money spent at dollar stores came from households with annual income exceeding $100,000.
Experts advise purchasing items like greeting cards, pregnancy tests, candy, gift and party supplies, and other items from the dollar store to maximize savings.
Some dollar store products can be low quality, and experts advise not purchasing them. This list includes 17 products to avoid at dollar stores, including batteries, toys, costumes, and more.
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