The examples and perspective in this article deal primarily with the United States and do not represent a worldwide view of the subject. (April 2021)
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.
Types (United States)
Discount stores in the United States may be classified into different types:
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.
- Apparel: Ross Dress For Less, Marshalls, Kohls, etc.
- Pet supplies: Petco, Petsmart
- Home furnishings and accessories: Big Lots, HomeGoods
- Office supplies: Staples, Office Depot, OfficeMax
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. as well, are:
Discount grocery store
Major discount grocery retail chains in the U.S. include Aldi, Lidl, Trader Joe's, Save-A-Lot and Grocery Outlet. Currently Aldi and Lidl are the largest discount retailers in the world operating more than 12,000 discount stores worldwide.
Variety stores, dollar stores, five and dimes
Variety stores in the U.S. today 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 period from the 1950s to the late 1980s, discount stores were more popular than the average supermarket or department store in the United States. There were hundreds of discount stores in operation, with their most successful period occurring during the mid-1960s in the U.S. with discount store chains such as Kmart, Ames, Two Guys, Gibson's Discount Center, E. J. Korvette, Mammoth Mart, Fisher's Big Wheel, Zayre, Bradlees, Caldor, Jamesway, Howard Brothers Discount Stores, Kuhn's-Big K (sold to Walmart in 1981), TG&Y and Woolco (closed in 1983, part sold to Wal-Mart) among others.
Walmart, Kmart, and Target all opened their first locations in 1962. Kmart was a venture of S. S. Kresge Company that was a major operator of dime stores. Other retail companies branched out into the discount store business around that time as adjuncts to their older store concepts. As examples, Woolworth opened a Woolco chain (also in 1962); Montgomery Ward opened Jefferson Ward; Chicago-based Jewel launched Turn Style; and Central Indiana-based L. S. Ayres created Ayr-Way. J. C. Penney opened discount stores called Treasure Island or The Treasury, Sheboygan, Wisconsin based H. C. Prange Co. opened a chain of discount stores called Prange Way, and Atlanta-based Rich's owned discount stores called Richway.
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. Kresge five and dime store disappeared, while the Dayton-Hudson Corporation eventually divested itself of its department store holdings and renamed itself Target Corporation).
In the United States, discount stores had 42% of overall retail market share in 1987; in 2010, they had 87%.
Many of the major discounters now operate "supercenters", which add 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.
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 to Walmarts. Dollarama was founded in Quebec in 1992. In 1998, Zellers bought out Kmart Canada, taking over its stores.
In 2011, Marshalls, owned by the American TJX Companies, entered Canada, and Zellers sold most of its stores to Target, but still operates 2 stores (in Etobicoke and Nepean) as liquidation centres for The Bay merchandise. Target Canada filed for bankruptcy in 2015, selling its stores to Walmart, Lowe's and Canadian Tire.
In 2016, the Hudson's Bay Company started opening Saks Off 5th locations to sell off-price brands. American off-price chain Nordstrom Rack has announced that its first Canadian location will be opened in Vaughan Mills in 2018.
Outside the United States and Canada, the main discount store chains listed by country are as follows:
Australia has many national and regional discount stores including Aldi, Big W, Kmart, Target, The Reject Shop, Cheap and Chips, Dollars and Sense, Shiploads, Red Dot and many more regional players like Prices Plus and many more. The Discount Variety stores sell goods across a large category of products and usually cheaper than Big Box stores as they focus on volumes rather than Markups per product.
Italy has numerous discount supermarkets and variety stores. The biggest chain is Eurospin, while others include Aldi, Tuodì, MD Discount, Todis, DPIU', Discount Dial, Lidl and Penny Market.
Action, Euroland, Solow, Big Bazar and Zeeman are Dutch discount variety stores and clothing retailers. Action and Zeeman both operate throughout Europe. In addition, the German discount supermarkets Lidl and Aldi both operate in the country.
Among New Zealand's main discount shops is The Warehouse.
- Minipreço / Dia (supermarket chain)
- Plus sold to Jerónimo Martins
- Netto converted into Intermarché
- Tiendas Ovejita
- Tiendas Daka
- Everyday low price
- Dollar store (five and dime, variety store)
- Warehouse club
- No frills
- Charity shop
- Types of retail outlets
- Maidstone mum
- Charles Lamb (1 Jan 2011). Essentials of Marketing. Cengage Learning. p. 465. ISBN 978-1133171904.
- "Walmart, Target, Kmart, Kohl's Lead 50 Years of Retail Revolution". adage.com. March 19, 2012.
- "Kmart History | Kmart | About Us | Transformco". transformco.com.
- "What is Lidl? Why this discount grocery store is giving Aldi a run for its money". TODAY.com.
- "Archived copy". Archived from the original on 2014-09-03. Retrieved 2014-08-27.CS1 maint: archived copy as title (link)
- Arkansas, Encyclopedia of. "Wal-Mart Stores, Inc.". Encyclopedia of Arkansas. The Central Arkansas Library System. Retrieved 8 February 2013.
- "America's top stores." Consumer Reports, June 2010, p. 17.
- "Bim A.Ş. > Welcome..." english.bim.com.tr. Retrieved 2017-08-21.
- Nelson, Walter Henry, The Great Discount Delusion, New York: D. McKay, 1965.