During the recession, the countercyclical discount retail channel experienced years of growth, even to the point of becoming one of the fastest-growing retail channels during the time period, according to “Dollar & Variety Stores in the US,” an April 2014 report by IBISWorld. However, as the economy improves, the channel is moving from the growth phase of its lifecycle to a mature phase, the Los Angeles-based market research firm says. This phase likely will be characterized by industry consolidation, it predicts in the report.
Just three months after IBISWorld’s report, this consolidation prediction came to fruition with a still-ongoing merger-and-acquisition competition among the Top 3 retailers in the channel. In late July, Chesapeake, Va.-based Dollar Tree Inc. announced that it had entered into a definitive agreement with Family Dollar Stores Inc. to acquire the Matthews, N.C.-based company through a cash-and-stock transaction.