Dollar stores are booming business, industry is expected to double in next few years

CLEVELAND - Dollar stores are a growing industry. There are more dollar stores than Starbucks or McDonalds.

The discount stores are expanding and looking more like a grocery store, offering frozen and fresh products. Dollar Tree recently joined its competitors in accepting coupons. With all this expansion and growth, we shopped five discount stores and crunched the numbers to see if dollar stores offer you a bargain.

[WEB EXTRA: Find dollar and discount stores in northeast Ohio: http://5.wews.com/uCL ]

"The new store, they have so much more now. It's awesome. I love it," shopper Kaylee McGinnis said.

McGinnis shopped the new Dollar General in Green. It's a stand-alone store and offers more frozen and fresh products. McGinnis traditionally bought cleaning products, jewelry and clothing at the dollar store. Now, she's thinking about food.

Dollar General said when it added perishables, the average shopper spent 60 percent more. So, should you buy into this new trend? Will it really save you a buck?

"Doesn't matter what economy - you save money, you save money," dollar shopper Ron Bever said.

Comparing prices

We shopped Dollar General, Family Dollar, Dollar Tree, Marc's and Walmart. We looked at the price for 15 products like pain relievers, Pop Tarts and wrapping paper. We looked at the unit price, the price you paid for the amount you bought.

At the stores we shopped, the dollar stores sold wrapping paper for 5 cents a square foot, Walmart sold it for 6 cents a square foot and Marc's sold it for 17 cents.

Before you get wrapped up in the dollar craze, do your homework. Just because the name says "dollar" doesn't mean you'll get the best deal for your dollar.

Family Dollar charged the most for M&M's at 76 cents an ounce. Walmart charged just 24 cents an ounce.

"I know the prices of everything before I go to the store," Walmart shopper Rose Paul said.

Paul goes form one store to the next to take advantage of the cheapest prices at each. Our test found you may not need to shop around to save money.

In our shopping trip we compared the same name brand at all five stores on 13 items. Our analysis revealed less than a dollar separated the lowest and highest retailer in our overall price comparison.

Dollar stores are the new convenience stores

"If it's about the same, the total bill might be lower because at a dollar store you'll buy less items as opposed to a Walmart," said Cleveland State associate marketing professor Elad Granot, Ph.D.

Granot said there's less impulse buying at a dollar store because there's simply less selection. Consumers we saw checking out at Dollar General spent between $20 and $30.

Granot said dollar stores are a threat to other businesses.

"It's not just Walmart taking a hit. Drug stores and pharmacies are taking a hit, and convenience stores."

Small box retailers can do things a big box retailer can't. Dollar stores serve neighborhoods where shoppers don't have cars, and offer discount shopping without the hassle.

"There's no big line," McGinnis said. "They're always wanting to help you. They are always greeting you. They are real helpful."

"It's convenient. It's close," Bever said.

That's why investors are pouring money into the dollar brand expecting to double the number of stores in the next few years.

You'll find some name brands at dollar stores, but you may not find all the ones you love. Also, sizes are smaller.

We found a 14 ounce Coke and Aleve pain relief with just six tablets inside.

Here's the unit price we paid for all the products http://5.wews.com/BM2

In our test, Walmart offered the cheapest unit prices, but barely. Prices can vary by store location and when you shop.

Tuesday on Good Morning Cleveland, we'll show you why Walmart is worried about this trend. We'll also reveal the tricks the company is using to get you to think you're getting a bargain.

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