The headlines continue to report on a bleak economic future in which consumers will be prioritizing cost cutting measures when it comes to their spending. However, not everyone will be affected the same. For example, in the middle- to upper-middle class suburban markets, even though the mom and the tween/teen customers will be forced to recalibrate their overall discretionary spending, these consumers will still want to feel as if they are engaging in a relatively elevated shopping experience.
Two discount brands, Dollar General and Five Below, are therefore going to ramp up expansion plans for their own versions of a more elevated discount concept, specifically to cater to this middle- to upper middle class customer who not only has higher standards, but also wants to save money. Dollar General will do this with its pOpshelf concept, and Five Below will do with its Five Beyond concept.
The two retailers have very similar trajectories and goals for these trendy rebrands: both introduced and test ran their respective new concepts in 2020, both anticipate opening about 200 new stores in 2023, and both have a goal of ultimately opening up to 1,000 of the new stores by 2025. The two retailers ultimately hope to widen their customer base by offering these more premium, trendier, higher priced goods in a new format.
Dollar General, which primarily opens new units in rural communities, will continue to target a completely new suburban market with its pOpshelf brand. Growth will take place in areas where suburban moms and their teen/tween children do their shopping, especially in neighborhood power centers, strip centers and lifestyle centers. Its merchandise consists of frequently rotating items, priced up to $5, that appeal to this new targeted audience, such as seasonal home décor, health and beauty items and party supplies. With a strong presence in the South, expect pOpshelf to soon become a national phenomenon in all U.S. suburban territories, beginning with the Midwest markets. Most of the new concept’s growth will consist of these newly branded pOpshelf stores, but Dollar General will also continue to test out store-in-store concepts (there are currently 40 Dollar General stores featuring an in-store pOpshelf section).
As for Five Below, this year the retailer plans to convert 400 of its existing stores into its “Five Beyond” concept, in which a store-in-store element features items that are priced beyond its usual $5 or less limit. Five Below first introduced the Five Beyond concept back in 2020, testing the idea in about 140 of its stores. By last year, 250 of its stores underwent this new Five Beyond layout conversion. The higher priced Five Beyond section generally contains items up to $10, but also includes products that are priced up to $25, such as for its for adjustable barbell/dumbbell weights set. Although the markets targeted for its new stores will include suburban areas, Five Below also plans to open additional units in semi-rural and urban markets where it is still underpenetrated.
