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Are Dollar Stores Really A Better Deal?

MINNEAPOLIS (WCCO) -- Dollar stores aren't just for bargain hunters anymore. The down economy is a big reason the discount chains are the fastest-growing retailers in the country right now.

In one survey, more than 70 percent of women said they've made a purchase at a dollar store in the last year. A quarter of the people shopping there make at least $70,000 a year.

But are dollar stores really a better deal?

WCCO went shopping for the same eight items at four different stores and found some surprises that could save you money.

At Dollar Tree, everything goes for a buck.

"I think there are more people coming here. I kind of look at it like the old five and dime is back," one customer told us.

The number of these stores is on the rise. Dollar Tree alone has added nearly a thousand stores across the country in recent years, including 10 in Minnesota.

What you'll find inside, reflects a larger appetite for the retailer that goes beyond cards, paper plates and wrapping paper.

"They're putting a lot of food in these dollar stores," one woman said.

Most stores have added a frozen food section and all now take coupons.

Other big-chains with that "dollar" name on their storefronts are also seeing more demand. Family Dollar sells most of its stuff for under $10.

Convenience seems to play a role but it's price that keeps customers coming back.

"I'm looking for different prices. Different bargains," one shopper told us.

WCCO did a little bargain shopping ourselves, picking up eight items at Dollar Tree to see how their prices really stack up. From soup to cereal, toothpaste to dish soap.
We compared those $1 items to prices at three other stores -- Family Dollar, Wal-Mart and Super Target.

There were some big differences, that as you'll see, add up to big savings.

First, a 12-ounce box of the new Dulce de Leche Cheerios was a good deal at Dollar Tree. Remember everything is $1. It sold for three times the price at Wal-Mart and Target and, $3.25 at Family Dollar.

We spotted another big difference in Progresso soup. A 19-ounce can of Vegetable Classic went for around $1.90 at both Wal-Mart and Target and, a heartier flavor for $2.15 at Family Dollar.

We asked Jim McComb to take a look at the price differences. He's been studying retail for more than 40 years.

"Where it really pays is to know the price of the things you buy," McComb said.

McComb added that shoppers will find the best deals on brand-name products.

A special buy from the manufacturer allows them to sell at such a low price but because the buys are so random, you never know what's inside the store.

McComb thinks it's worth the trip to find out.

"Households have become more frugal. They're looking for ways to save money. Dollar stores deliver on that," McComb said.

Several of the products we picked up were separated by just a few cents at all four stores like toothpaste, a 5-ounce box of candy, and a pot pie.

McComb says big name retailers are paying attention to the success of dollar stores. Target added a dollar bin up front and matches advertised prices.

At Wal-Mart if you bring in an ad, they'll also match prices but, Family Dollar told us they typically offer items cheaper than most stores and that its prices shouldn't be compared to Dollar Tree.

It's why McComb warns shoppers that just because the dollar name is on a store, doesn't mean you'll find the best deal.

Just take a look at the totals from our shopping trip:

Eight items cost $8 at Dollar Tree, $11.05 at Wal-Mart, 29 cents more than that at Target and the most at Family Dollar. The total there came in at $12.05.

That's more than 50 percent more than what we paid at Dollar Tree.

A store going mainstream, as managing every dollar seems to be more in style than ever before.

McComb also said it's important for customers to understand the price per ounce at all of these stores. Many items inside Dollar Tree are smaller.

Retail experts also agree that dollar stores offer good deals on their generic products. One test found the generic brands at dollar stores are nearly 30 percent less than at big-name retailers and grocery stores.

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