It’s no secret in the business of retail that customer buying behavior paves the path to the future. Factors like lifestyle, proximity to urban markets, cost of goods, economy and yes, inflation, along with an endless number of decisions shoppers make everyday effect the success of any one retail location. The resulting impact of those decisions serves to shape how retail transforms and conforms to shopper needs. One category of retail that has been on the rise for the last decade and even more so in the last three years, is “value retail.”

What is a value retailer? A value retailer is a retail outlet in which the premises and décor are without frills and where prices are cheaper. Now, because customers can get low prices almost anywhere, value retailers are not only competing against each other, but against more midmarket retailers. In essence, it’s a hybrid of mass merchandise and convenience, packed into a smaller footprint, historically set in rural and suburban areas.

Value retailers offer the shopper a limited but competitively priced offering of products on everything from household and home décor to grocery, beauty and health, hardware, pet supplies, seasonal and more. Add to that the occasional opportunity to grab deals on overstocked inventory, this $10,000 square foot island of essential + impulse goods is rapidly becoming a staple in America’s retail landscape.

Make no mistake, a value retail store is not JUST a discount store. Discount stores always offer products at a discount or lesser rate than the maximum retail price. Their merchandise also often comes from leftover inventory from other retailers at the end of a season. Their main objective is to draw bargain shoppers. The value retailer draws on the same demographic and sometimes offers the same buyout opportunities; yet it mixes in the features of easy egress, all-in-one shopping and budget-savvy steals on non-essential items like gifts and seasonal and themed décor.

With retail store openings on the uptick in 2022, (statista.com), a sharp rise in the value retail segment has given way to growing retailer brands (Five Below, Family Dollar and more). It’s also opened opportunities for new concepts, such as the recently announced Dollar Tree and Family Dollar “combination” store model, opening at a rate of approximately 1,000 in 2022 (Source: Chain Store Age).

So, what does the value of the “value retailer” bring to players like brands and suppliers? An added marketing channel and possibly, a test market for product development and in return, banking of sell-through data as this format continues to grow. For shoppers commuting from work to home or simply needing to make a “run” to the store, it offers more choices, faster in-and-out times and a little bit of “happiness” factor that most any shopper can identify with – the fun of finding a deal on that something unique, or unexpected, along the way.

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