Remember when a dollar store was actually a dollar store?
Sure, when we checked some local dollar stores we found plenty of house brand items still at a buck each. But many name brand goods were $3, $4 and $5, which raises the question of whether you are really getting a good price.
Surprised When He Shopped Elsewhere
Michael Sawyer thought he was getting a bargain at Family Dollar, until he shopped somewhere else.
"The average person here doesn't come out of the neighborhood to shop," Sawyer said. "They assume they are getting cheaper prices. But in reality, they are often not."
We Compare Items
To determine if his anecdotal findings were true, we bought a market basket of name brand food and laundry items at two different dollar store chains: Family Dollar and Dollar General.
We then compared our findings with a basket of the same items at a nearby Walmart.
- Liquid Tide
- Palmolive dish soap
- Jif peanut butter
- Ritz crackers
- Chips Ahoy cookies
- Planters peanuts
- Gallon of 2% milk
- 2 liter Coke
The dollar stores were cheaper on some products.
For instance, 28-ounce Palmolive was cheapest at the two dollar stores -- just $2 versus $2.37 at Walmart.
Advantage: Dollar stores
But on other items, Walmart had the lower price.
Example: Chips Ahoy cookies were $1.98 at Walmart versus $2.75 at the two dollar stores.
Some items were tricky. Ritz crackers looked like a real bargain at Family Dollar at $2.50 -- the same price as Walmart. But the box was 3 ounces smaller than Walmart's box.
Per ounce, it was again advantage: Walmart
When we totaled the numbers:
- Dollar General came in cheapest at $28.08
- Walmart was next at $28.66
- Family Dollar was the most expensive, by a dollar, at $29.68
Our findings echo what Barron's Business News recently reported, based on a nationwide survey of 42 household items conducted by the firm Sterne, Agee, & Leach. In their survey, just like ours, Dollar General came in cheapest of the three. Walmart was next. Family Dollar, again, was most expensive.
We contacted Family Dollar, where a spokesman thanked us "for reaching out with our findings," and referred us to a company announcement a few weeks ago.
The announcement from the company's CEO on April 10, 2014, stated that "it will be lowering prices on a thousand items" to be more competitive.
That could give it an advantage -- next time.
The Bottom Line
Our local test, and national surveys, both find dollar stores are great for generic, house brand items, which are still a dollar in most cases, and offer a savings compared with Walmart or grocery stores.
If you find a dollar store, like Dollar Tree, that still advertises "everything for a dollar," that's even more savings.
We did not test Dollar Tree because they do not have many national name brands, like Tide detergent.
But with national brands, we found you may do a bit better shopping around. Dollar stores may save on some items, but may not on others.
That way you don't waste your money.
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