Dollar Store Market Report
Q4 / 2023
- Since Q3 2023 Fed rates have remained the same, yet Dollar Store’s average cap rate has still increased from 6.34% to 6.51%, or 17 bps.
- In response to inflationary pressures, Dollar Stores are experiencing a decrease in customer purchases, particularly for essential items. Non-essential products, which produce higher profit margins, are experiencing less sales volume.
- Dollar General experienced many hurdles this quarter, including a CEO change, OSHA fines, reduced full-year sales and earnings guidance, supply chain issues, and inventory shrinkage.
- Despite skepticism reflected in stock loss this quarter, Dollar General executed nearly 850 real estate projects during the period.
- Moreover, Dollar Stores have benefitted from a reduction in ocean freight costs and an increased customer base with household incomes over $125,000.