A discount store or discounter offers a retail format in which products are sold at prices that are in principle lower than an actual or supposed "full retail price". Discounters rely on bulk purchasing and efficient distribution to keep down costs.[1]
Types (United States)
Discount stores in the United States may be classified into different types:
Hypermarkets (superstores)
Discount superstores such as Walmart or Target sell general merchandise in a big-box store; many have a full grocery selection and are thus hypermarkets, though that term is not generally used in North America.[2] In the 1960s and 1970s the term "discount department store" was used, and chains such as Kmart, Zodys and TG&Y billed themselves as such.[3] The term "discount department store" or "off-price department store" is sometimes applied to big-box discount retailers of apparel and home goods, such as Ross Dress for Less, Marshalls, TJ Maxx, and Burlington.
Category killers
So-called category killer stores, specialize in one type of merchandise and sell it in big-box stores. Examples include:
When membership is required, discount superstores are known as warehouse clubs, and often require purchases of larger sizes or quantities of goods than a regular superstore. The main national chains, both of which have operations outside the U.S., are Costco and Sam's Club.
Discount grocery store
Major discount grocery store retail chains in the U.S. include Aldi, Lidl, Save-A-Lot and Grocery Outlet.[4] Currently Aldi and Lidl are the largest discount retailers in the world operating more than 25,000 discount stores worldwide between them.[5]
Variety stores, dollar stores, five and dimes
Variety stores in the U.S. today, are most commonly known as dollar stores such as Dollar General, Family Dollar and Dollar Tree, which sell goods usually only at a single price-point or multiples thereof (£1, $2, etc.). During the early and mid-twentieth century they were commonly known as "five and dimes" or "dime stores". Stores of the main chains, Woolworth's, J. J. Newberry and S. S. Kresge, lined the shopping streets of U.S. downtowns and suburbs, and starting in the 1950s they also opened branches in shopping malls. These chains originally sold items for 5, 10 or 25 cents, but many later moved to a model with flexible price points, with a variety of general merchandise at discounted prices, in formats smaller than today's discount superstores.
During the late 1970s and the 1980s, these chains typically were either shut down or sold to a larger competitor. Kmart and Target themselves are examples of adjuncts, although their growth prompted their respective parent companies to abandon their older concepts (the S. S. Kresgefive and dime store disappeared, while the Dayton-Hudson Corporation eventually divested itself of its department store holdings and renamed itself Target Corporation). [citation needed]
In the United States, discount stores had 42% of the overall retail market share in 1987; in 2010, they had 87%.[7]
Many of the major discounters now operate "supercenters", which adds a full-service grocery store to the traditional format. The Meijer chain in the Midwest consists entirely of supercenters, while Wal-Mart and Target have focused on the format as of the 1990s as a key to their continued growth. Although discount stores and department stores have different retailing goals and different markets, a recent development in retailing is the "discount department store", such as Sears Essentials, which is a combination of the Kmart and Sears formats, after the companies' merger as Sears Holdings Corporation.
Canada
Woolworths entered Canada in the 1920s, the stores were converted to the Foot Locker, Champs Sports and other stores in 1994. Kresge's, a competitor to Woolworth's entered the Canadian market in 1929.
Zellers was founded in 1931, and was acquired by the Hudson's Bay Company in 1978. Giant Tiger opened its first store in Ottawa in 1961, modeled on Woolworths. Winners was founded in 1982 in Toronto, and sells off-price brand clothing. Costco entered Canada in 1986. In 1990, the American chain Walmart purchased the Woolco chain in Canada and converted the stores into Walmarts. Dollarama was founded in Quebec in 1992. In 1998, Zellers bought out Kmart Canada, taking over its stores.
In 2016, the Hudson's Bay Company started opening Saks Off 5th locations to sell off-price brands. American off-price chain Nordstrom Rack opened its first Canadian location in Vaughan Mills in 2018.
