At a time when most of the retail industry is sputtering, affordable options such as resale shops and discount stores are emphatically bucking the trend.
The tri-state era has been emblematic of the retail shift.
Last month, discount retailer Five Below opened its doors in Dubuque’s Asbury Plaza. Less than one mile away, crews are collecting merchandise and stocking shelves at the future home of Stuff, Etc., a consignment store slated to open next week in the former home of Courtside Sports Bar & Grill.
At Stuff Etc., items ranging from clothing to furniture and home decor are generally sold at one-third to half the price a shopper would find at a traditional retail outlet.
Director of Operations Sara Sundblad said these savings resonate regardless of broader economic conditions.
“Even when the economy is doing well, people are conscious of where and how they are spending their dollars,” she said. “They still have a mindset of trying to stretch their money as far as they can.”
AGAINST THE GRAIN
The growth in budget-conscious offerings has come at a time when most retail outlets are floundering.
Multiple media reports have cited data from global marketing research firm Coresight Research, which determined that thousands of stores already have closed in 2019 and more than 7,000 are expected to close by the end of 2019.
Of the 2,780 stores that were expected to open in 2019, Coresight found that nearly two-thirds are discount shops.
Dollar General announced plans to open 975 new locations in 2019, making it the fastest-growing retailer in the U.S. by a wide margin. Each of the five projected fastest-growing retail chains in 2019 are discount stores, with Dollar Tree, Family Dollar, discount grocer Aldi and Five Below rounding out that list.
Five Below, which sells items for $5 or less, opened in Dubuque at 2535 Northwest Arterial in the first week of June, occupying the former home of Sears Hometown Store.
Corporate officials from Five Below did not respond to a request seeking comment. On its website, the store describes itself as a place where “tweens, teens and beyond” are free to enjoy a “color-popping, music-pumping, super-fun shopping experience.” Products include clothing, candy, toys, sports equipment and games.
Joe Bell serves as the spokesman for Cafaro Co., which owns the Kennedy Mall in Dubuque as well as the majority of Asbury Plaza. He noted that discount stores have proven to be surprisingly resilient over the past decade.
“Even through the Great Recession, that dollar store segment was the one segment of retail that kept growing,” he said.
The resale market also is growing at a rapid clip.
Retail analytics firm GlobalData recently concluded that the second-hand apparel market is now worth $24 billion. This figure is expected to rise to $64 billion by 2028.
Sundblad, of Stuff Etc., isn’t surprised by the growth in resale fashion — especially when it comes to children’s clothing.
“I am a mom and I know that kids grow up fast and can outgrow their clothes so quickly,” she said. “So I take advantage of any opportunity to save money on that. I think a lot of moms think that way.”
Bell noted that chain stores don’t make decisions to open a new location on a whim. Instead, new openings take place after extensive market research.
Such considerations could take Dubuque out of the running when it comes to certain brands.
“I think the first question is, ‘Is my target audience in this community?’” said Bell. “If you are a higher-end retailer like a Nordstrom or an Apple store, they have very precise parameters they are looking for in terms of disposable income, education levels and proximity to other higher-end shopping.”
Many discount stores, meanwhile, are finding that small communities are a perfect fit for their expansion plans.
Family Dollar opened a new location in Bellevue, Iowa, in the fall of 2018, taking over a property that had formerly housed Pamida and Shopko stores.
Carrie Weaver, executive director for the Bellevue Area Chamber of Commerce, said the variety store has had a positive impact on the local economy.
“We’ve had a lot of people from smaller towns, like La Motte and Springbrook, who are now coming into Bellevue to do their shopping,” Weaver said.
She also believes the Family Dollar has kept more dollars in the community, noting that Bellevue residents came make a “quick pit stop” in town instead of traveling to Dubuque or Maquoketa.
Weaver acknowledged that dollar store chains can sometimes stoke fears among local business owners who may lose market share. She doesn’t believe that’s the case in her community.
“I think people are loyal to the local businesses,” she said. “My hope is that when they are shopping (at Family Dollar), they are doing that instead of leaving the community to go somewhere else.”