Dollar Stores' Shrinkflation Strategy Costs Low-Income Shoppers More

Despite their low prices, dollar stores actually end up costing consumers more per unit compared to large retailers like Walmart and Target.

Dollar stores like Dollar General and Dollar Tree rely heavily on a strategy called "shrinkflation", where they reduce product sizes while keeping prices the same to maintain high profit margins.

With over 35,000 locations combined, dollar stores' use of shrinkflation affects massive numbers of primarily low-income shoppers who have few other options.

Customers dislike shrinkflation but often can't avoid it, as dollar stores target cash-strapped shoppers and have driven out competition in many areas.

Dollar stores had a 7% higher profit margin in 2023 than Walmart, evidencing financial success from shrinkflation and their market dominance.