If retailing were a horse face, and in some ways it is, I would bet my money on the dollar stores: Family Dollar, Dollar General, Five Below, Dollar Tree in particular. No retailers are better positioned for a post mass-merchandiser landscape and here is why: They have the right store size for the right demographic.
21st century retailing is characterized by an emerging generation of shoppers that has lost its love of the automobile and embraces the Internet as its highway to the world. They see shopping as a process that involves Internet research and ecommerce purchasing. They look at bricks and mortar retailingand they see out-of-stocks; massive parking lots and a cumbersome checkout process...why bother? These consumers are turning increasingly to on-line retailers like Amazon.
There are shoppers, however, who do not see the Internet as a viable path to consuming. These are the shoppers at the low end of the economic ladder who do not have credit (an essential to effective on line shopping) and typically do not have access to the Internet.
The dollar stores are highly attractive to this group due to their low prices; their limited but targeted product mix and their easy access. Their small store footprints are ideal for reduced consumer foot traffic and offer low overhead in rents and payroll. They also allow them to be highly efficient in opening, closing and moving stores.
Large mass merchandisers like Wal-Mart and Target are in possession of extremely large format stores that