In a market that has shown little enthusiasm for initial public offerings, two of the most successful recent market entrants have been dollar store chains. Homegrown company Dollarama has seen its stock rise 12 per cent since hitting the Toronto Stock Exchange in October and shares of U.S. retailer Dollar General Corp. popped in their first day of trading on the New York Stock Exchange on Friday.
It's not hard to see the attraction for investors. Dollar stores have been one of the few retail segments to achieve revenue and earnings growth during the recession.
My love of dollar stores goes beyond their investment potential. I visit my neighbourhood discount store a few times a month to stock up on household supplies that can cost five times the price at a regular retailer. Judging by the number of BMWs and Mercedes I see in the lot outside the store, even those with means to pay more head to the dollar store for deals.
Here are my five top categories for bargain-hunting at the dollar store.
1. Party goods
When throwing birthday parties for my kids, the costs quickly mount. Aside from the food and the venue, there are the paper goods, decorations and loot bags to buy. At a party goods store, you can expect to pay around $5 for a package of 12 plates branded with your kids' favourite theme. Dollar stores often carry the same brands at hugely discounted prices. For my daughter's Disney Princess party last year, I bought packages of Sleeping Beauty plates, cups and napkins for $1 each. If you take the time to put together your own loot bags, you can save by finding trinkets and candies to fill them at the dollar store as well. A pre-packaged loot bag at a party store costs about $7. For my daughter's party, I found bags to hold the loot for $1 each - they were pink and fuzzy and came with a set of hairclips. I then picked up glitter wands and tiaras that came in packages of 12 for $1 each. Add in a lollipop and each loot bag cost me less than $1.50.
2. Arts and crafts supplies
After picking my daughters up at school at the end of the day, I come home to get dinner ready. Instead of distracting them with the television during that crucial half-hour, I like to put out arts and crafts supplies and let them get creative. I stock up on construction paper, colouring books, stickers, crayons and markers, glue, feathers, glitter and googly eyes at the dollar store. For under $10, I can get enough to keep my kids busy for a month's worth of meal preparation time.
My husband and I both pack our lunches for work and I send my eldest to school with a lunchbox every day. To keep the meals from becoming monotonous, I often prepare pasta, rice, fish or soup instead of the classic sandwich, requiring an assortment of plastic containers. I find my daughter is also more likely to eat her lunch when I send it "Bento box-style" with a variety of foods in small packages. (Check out SavvyMom.ca for Bento Box lunch ideas.)
I've seen Bento lunchboxes for kids in high-end kitchen stores for as much as $50. I've made my own for less than $5 by putting together containers from the dollar store. While you can find products such as GladWare at the supermarket, they're pricey. I often find that brand discounted at my local dollar store, along with many other options in the aisle wholly devoted to food storage.
4. Hair accessories
With two young daughters, I am constantly adding to my supply of hair accessories for them. My girls insist on having their hair decorated every day, but bows and barrettes have a short lifespan in our house, quickly falling victim to either loss or destruction. A $16 hair band is not for us. We love the wall of hair accessories at our local dollar store and I give my girls free reign to choose their own items.
5. Gift wrap
I don't know why anyone would choose to pay supermarket or drugstore prices for wrapping paper when a wide variety can be found for $1. Clear cellophane wrap and wicker baskets for presents are some of my favourite dollar store finds as they can often cost 10 times the price elsewhere.
"I only buy gift bags at the dollar store, and am finding that they actually have decent greeting cards there as well," says one friend, who visits the discount retailer as often as I do.
I like to stock up on colourful bags and cards and store them away in a cupboard so that I'm always prepared for any gift-giving occasion.
One thing to beware of at the dollar store is that many of the discount toys and games available come with small parts. If you have a child under the age of three, you'll find many of the toys are not appropriate. For older kids, though, the dollar store is a perfect place to help teach them value of money.
"We often find that our daughter likes her dollar store toys better than her expensive ones," says one mother I know. "My husband uses the dollar store as a teaching opportunity. He gives her $5 and tells her how many toys she can buy with that, and then makes her pay the cashier.
If only the shares of dollar store chains were as affordable as their wares.