Variety store

Based on Wikipedia: Variety store

In 1884, a young man named Michael Marks opened a stall in Leeds' Kirkgate Market with a sign that would change retail forever: "Don't ask the price, it's a penny." That simple idea—everything at one fixed, low price—would eventually grow into Marks & Spencer, one of Britain's most iconic retailers. But more importantly, it planted a seed that would sprout into an entire category of commerce: the variety store.

Today, we call them dollar stores. Or pound shops. Or 100-yen shops. The names differ by country and currency, but the underlying concept remains remarkably consistent across continents and cultures: sell a vast array of goods at rock-bottom prices, often at a single fixed price point that makes shopping feel almost effortless.

The Five and Dime Revolution

The American version of this story begins with Frank Winfield Woolworth, who noticed something peculiar happening in Michigan and western New York in the late 1870s. Small "nickel stores" were thriving by selling everything for just five cents. The prevailing wisdom of the time held that no store could survive selling only cheap goods. Woolworth disagreed.

On February 22, 1879, he opened his Great Five Cent Store in Utica, New York. It worked. Then it more than worked—it spawned an empire and created an American institution: the "five and dime."

The names multiplied almost as fast as the stores themselves. Five and ten cent store. Five and ten. Five and dime (a dime being the American word for a ten-cent coin). Dime store. 5, 10 & 25 cent stores. Five cent to one dollar stores. Each variation reflected how retailers gradually expanded their price points while keeping that essential promise of affordable everything.

Woolworth's wasn't alone for long. Kresge, W.T. Grant, G.C. Murphy, J.J. Newberry, and Ben Franklin all joined the parade. The format proved so successful that by the mid-twentieth century, these stores had become fixtures in virtually every American downtown and shopping district.

How Dollar Stores Actually Make Money

The economics of variety stores seem almost paradoxical. How can a business thrive selling things for a dollar when that dollar has to cover the cost of the product, shipping, rent, employees, and profit?

The answer involves two distinct strategies working in tandem.

The first is pure volume. Buy and sell vast quantities of goods at heavily discounted prices, and you generate a small profit margin that gets multiplied across millions of transactions. It's the retail equivalent of making it up on volume—except it actually works when executed properly.

The second strategy is more psychologically clever. Many items in dollar stores are priced at or even above what you'd pay at regular retailers. But consumers perceive them as bargains because they're surrounded by genuinely cheap items. That box of name-brand crackers might cost more than at the grocery store, but your brain has already decided everything here is a deal. For fixed price-point stores, this effect can be amplified by reducing package sizes—you're paying a dollar, yes, but for less product than you'd get elsewhere.

The Supply Chain Secrets

Where does all this cheap merchandise come from? Several sources, each with its own economics.

Generic brands and private labels form the backbone. These are products specially manufactured using cheaper materials and simpler processes than name-brand equivalents. The toothpaste does the job. The batteries work. They just won't necessarily perform quite as well or last quite as long as premium alternatives.

Then there's the grey market—legitimate products sold outside their intended distribution channels. A manufacturer might produce goods for one market, but those goods somehow end up being sold in another, often at lower prices than the manufacturer intended.

Closeout sales provide another rich vein of inventory. Seasonal merchandise that didn't sell during the holidays. Promotional items from campaigns that ended. Bankruptcy stock from failed businesses. Real Deals, a regional dollar store chain in Syracuse, New York, stocks almost its entire inventory from surplus goods like these.

And then there's out-of-date food products—a category that varies dramatically by jurisdiction. In the United States, most items can legally be sold regardless of their sell-by date, with certain perishable exceptions depending on the state. In the United Kingdom, by contrast, it's illegal to sell goods after their "Use by" date. This difference creates entirely different approaches to food inventory across the Atlantic.

International trade makes much of this possible. Goods manufactured in countries with lower wages, cheaper resources, or more favorable tax structures can be imported and sold profitably at prices that would be impossible to match with domestic production. The economics are straightforward: a general importer brings goods into the country and sells them wholesale to the stores.

The Global Dollar Store Phenomenon

What Americans call dollar stores, the rest of the world calls by names that reveal the same underlying math adjusted for local currencies and price levels.

In Japan, the 100-yen shop (or "hyakkin" in Japanese shorthand) exploded in popularity starting around 2001. Economic historians see this as an aftereffect of Japan's "Lost Decade"—the extended recession that made value shopping newly attractive to a population that had grown accustomed to prosperity. The Daiso chain, which opened its first store in 1991, now operates around 2,400 stores in Japan alone, adding roughly 40 new locations every month. Daiso has since expanded to North America, Australia, and the Middle East.

For years, these 100-yen shops weren't even permanent stores. They operated as vendors under temporary, foldable tents, typically positioned near supermarket entrances. Some still do.

China has its own version: the 2-yuan shop (or 3-yuan in more prosperous areas). Hong Kong takes the competition further, with major department stores opening $10 shops (about $1.28 in American currency) to capture the market. But competitors quickly emerged with $8 shops and even $2 shops (just 26 American cents), pushing prices ever lower, particularly in poorer neighborhoods. Hong Kong's lack of sales tax and easy access to mainland Chinese manufacturing help make such extreme price points viable.

The format has adapted to local conditions everywhere. Taiwan has stores at NT$39 and NT$49 price points, scattered through night markets, shopping streets, and department stores. The highly competitive Taiwanese retail environment means many of these stores fail, but new ones keep opening. India's US Dollar Store chain, founded in 2003, started by importing merchandise from America, then pivoted to sourcing from China, Indonesia, Thailand, Spain, Portugal, the UK, and other countries as it grew to over 200 locations.

A World Tour of Fixed-Price Retail

The global variation in names offers a fascinating tour through currencies and shopping cultures.

In Kuwait, look for 100 fils shops. Saudi Arabia and the Gulf states have 2 riyal shops. Before 2011, Syria had 25 or 50 lira shops (that's pounds in Arabic currency terminology, not British currency). Jordan offers 20 or 50 qirsh shops—qirsh being another term for piastres, the subdivision of the Jordanian dinar.

South Korea has 1000 won shops. The Philippines has 88 or 99 peso stores. Thailand offers 10 or 20 baht shops. Malaysia has 2-ringgit stores alongside the MR.DIY chain. Israel has "Hakol Bedollar" stores—Hebrew for "everything for a dollar."

Europe's relationship with fixed-price retail is complicated by the euro. Before the common currency, each country had stores named for local denominations: Portugal's "Trezentos" shops (300 escudos, about €1.50), Spain's "Todo a 100" stores (100 pesetas, about €0.60), Greece's "300" stores (300 drachmas, €0.90). The euro erased these charming local names, replacing them with pan-European chains like Action, HEMA, and Zeeman that operate across Belgium, France, Germany, Luxembourg, and the Netherlands.

In Spain, the expression "todo a 100" entered colloquial speech to describe anything cheap, kitsch, or low quality—a linguistic legacy of the original fixed-price stores that persists even though most items now cost €1 or more.

Germany has ToBi stores—short for "Total Billig," meaning "totally inexpensive"—where most items cost one or two euros. TEDi operates 1,400 stores across Europe. Russia had "Fix Price," which started by selling everything at 30 rubles, gradually increased to 55 rubles as the business grew, then eventually abandoned fixed pricing entirely to become a conventional discount store.

The British Story

When Woolworth's arrived in Britain in 1909, the locals had their own name for the format: "threepenny and sixpenny" stores, with "3d and 6d" displayed prominently on shop fronts. (The "d" stands for denarius, the Roman coin that gave British pennies their abbreviation until decimalization in 1971.)

That original Woolworth's is long gone, but its descendants remain. Poundland. Poundstretcher. 99p Stores. Home Bargains. B&M. OneBeyond. The names have changed, but the format endures.

One interesting finding from British research: contrary to what you might assume, these stores don't exclusively serve low-income areas. The 99p Stores chain actually reported an increase in higher-income customers after the 2008 financial crisis. When money feels scarce, even wealthy people become bargain hunters.

The American Resurgence

The original five-and-dimes faced a slow decline in America starting in the 1960s. Suburbanization pulled shoppers to malls. Specialized retailers—office supply stores, discount shoe chains, fabric stores, toy stores, and discount drug stores—carved away at the variety store's generalist advantage. Grocery stores and drug stores expanded their candy selections, eliminating another reason to visit the dime store.

The last American Woolworth's closed in 1997. Newberry's was sold to McCrory in 1972; McCrory went bankrupt in 1992, and all its brands vanished by 2002. Of the original major chains, only Ben Franklin survives in its original form. Kresge transformed into Kmart. Sam Walton's original variety stores became Walmart.

But starting in the late 1990s, a new generation of dollar stores emerged and expanded aggressively enough to capture national attention. They succeeded partly because of their convenience—freestanding smaller stores located in small towns, downtowns, and neighborhoods rather than in distant malls. They also succeeded partly because of impulse purchasing: enter a dollar store for one item, leave with a basket full of things you didn't know you needed.

The growth has been extraordinary. According to IBISWorld, dollar stores grew 43 percent between 1998 and 2018, becoming a $56 billion industry. Colliers International, a real estate services firm, noted that there are now more dollar stores than drug stores in America. As other retailers close locations, dollar stores often move into the vacated spaces.

By 2019, Dollar Tree had higher annual sales than Macy's—a stunning comparison between a company that sells everything for a dollar (or thereabouts) and one of America's iconic department store chains. Dollar and variety store revenue reached $77 billion in 2018.

The major American players today are Dollar General, Dollar Tree (which owned Family Dollar until 2025), the 99 Cents Only Stores, and Five Below. Dollar Tree operates around 14,000 locations. Dollar General has roughly 15,000. Five Below, which targets a slightly younger demographic with products up to five dollars, had 745 stores and growing.

Canada has its own flourishing market: Dollarama with over 1,000 locations, Dollar Tree Canada, A Buck or Two, Great Canadian Dollar Store, and Your Dollar Store With More.

The Food Desert Controversy

Not everyone celebrates the dollar store boom. A growing body of research, advocacy, and journalism has raised concerns about dollar stores and food access.

The argument goes like this: when dollar stores enter a community, they outcompete local grocery stores. These dollar stores sell some food items—snacks, canned goods, sometimes basics like bread and eggs—but they don't offer the full range of fresh produce, meats, and dairy that a real grocery store provides. When the local grocery store closes and the dollar store remains, the community loses access to healthy, affordable food. A food desert is born.

Dollar Tree disputes this characterization, arguing that in many cases its stores actually create food options in areas that previously had none. The truth likely varies by community. In some places, dollar stores may indeed fill a gap. In others, they may have displaced better options.

The debate became more pointed in 2023 when Dollar Tree reportedly stopped selling eggs after egg prices spiked nationwide. For customers who relied on the store for basic food items, this highlighted the limitations of dollar stores as food sources.

Several U.S. states have responded by passing restrictions on where new dollar stores can open—an unusual form of zoning regulation that attempts to protect existing grocery stores or encourage the development of more comprehensive food retailers.

The Price Point Illusion

Here's a detail that often surprises first-time shoppers: not all "dollar stores" actually sell everything for a dollar. The names have become category identifiers rather than literal price promises.

Dollar General and Family Dollar both sell items at more or less than a dollar—often significantly more. Five Below sells items up to five dollars. Some stores sell goods at multiples of their named price, or offer multiple items for the single price. And in places with sales tax, that dollar item might cost $1.06 or $1.08 at the register.

Dollar Tree held the literal dollar-price line longer than most, which made its 2021 decision to raise its primary price point to $1.25 particularly newsworthy. Even that small increase represented a fundamental shift for a company built on single-dollar pricing.

The price point illusion works both ways. In Japan's 100-yen shops, certain items like chocolate bars may actually cost more than at other stores. The fixed-price format creates a perception of value that doesn't always match the reality of individual products.

The Demographics Surprise

There's a persistent assumption that dollar stores serve primarily low-income communities. The reality is more complicated.

Atherton, California has a variety store within its city limits. Atherton's median household income approaches $185,000 per year, making it one of the wealthiest municipalities in America. Apparently even the rich appreciate a bargain.

Studies of food discounters in Great Britain show a varied demographic mix. The 2008 financial crisis pushed higher-income customers into stores they might previously have avoided. Once there, many discovered that cheap doesn't necessarily mean bad—and some stuck around even after their finances recovered.

The Global Juggernauts

While most dollar stores remain regional or national chains, a few have achieved truly global scale.

Miniso, a Chinese variety store chain specializing in household goods, cosmetics, stationery, toys, and kitchenware, reached $1.5 billion in sales revenue by 2016. It operates 1,800 stores across Asia, Europe, Oceania, Africa, North America, and South America. The stores feature a distinctive minimalist aesthetic that differentiates them from the cluttered look of traditional dollar stores.

Daiso, the Japanese 100-yen chain, has expanded beyond Japan to North America, Australia, Asia, and the Middle East. With 2,400 stores in Japan alone and roughly 40 new openings per month, it represents one of the most successful exports of the fixed-price retail concept.

Why This Business Model Endures

From Michael Marks' penny stall in 1884 to today's 77-billion-dollar industry, the variety store has proven remarkably durable across more than a century of economic cycles, technological changes, and shifts in consumer behavior.

The appeal is partly practical—everyone needs cheap household goods, and convenience matters. But it's also psychological. Fixed-price shopping removes a cognitive burden. When everything costs a dollar (or a pound, or 100 yen), you don't have to compare prices. You don't have to do mental math. You just decide whether you want the item.

That simplicity creates its own form of pleasure. Shopping becomes browsing, discovery rather than calculation. The unexpected find—the surprisingly good product at the improbably low price—creates small moments of delight that keep customers coming back.

As long as people need things and want them cheap, the dollar store will endure. The names will change. The price points will adjust for inflation. The supply chains will adapt to new global realities. But somewhere, someone will be opening a store with a simple promise: don't ask the price.

It's whatever's on the sign.