9 Out of 10 Americans Shop at Dollar Stores. Are They Actually Cheaper?

Dollar store shopping can be a great way to save money and beat inflation. Which is one reason dollar stores have become so popular in recent years. According to Consumer Reports, 88% of Americans shop at dollar stores at least occasionally. Almost a third of respondents in the 2021 Consumer Reports survey said they shop at dollar stores more than once a month, while 19% said they use them once a week or more.

The survey shows that lower-income households are more likely to use dollar stores regularly. Of the people who shop in dollar stores at least once a week, 54% earn less than $59,000 a year. The difficulty here is that dollar stores are not always the cheapest option, particularly when you are able to buy in bulk.

Do dollar stores cost less?

Bargain hunters will be familiar with dollar stores' no-frills approach. Many of these stores reduce costs by hiring fewer staff and carrying limited product ranges. As a result, it's easy to assume -- as many survey respondents did -- that dollar stores will cost less. Indeed, over 70% of those surveyed said they shopped in dollar stores because it is less expensive.

But is that really the case? The only way to know for sure is to compare prices on the items you buy. To get an idea, we looked at the cost of some common items in both Walmart and Dollar General online. Dollar General came out slightly cheaper overall -- but it was close. And item by item, Walmart was cheaper for five out of nine products in our basket.

To keep it fair, we took the lowest cost item in each store and matched package sizes as much as possible. These types of price comparisons are only an indication -- a lot depends on what you buy and which stores you visit. Plus, these calculations don't take into account in-store deals or extra savings from coupons or cash back apps.

It's also worth pointing out that Walmart has much more variety, in terms of types of product range and package sizes. Sure, the 32-ounce bag of rice at Dollar General cost slightly less. But it still worked out to a cost of $0.05 per ounce. Walmart sells a 20-pound bag of white rice at $11.70, which is around $0.04 per ounce. Buying in bulk isn't always an option, particularly when money is tight. But it can be a big money saver -- consider splitting the cost with a friend or neighbor so you both benefit from the savings.

How to compare prices

One of the biggest challenges with dollar store bargain hunting is that package sizes don't always match what you'll find in other grocery stores. For example, in the table above, at first glance, Dollar General's Frosties seem cheaper. However, the package is smaller and when you calculate the price per ounce, Walmart wins. Learning how to accurately compare prices can mean more money in your bank account.

To calculate the price per ounce (or in the case of liquids, the price per fluid ounce), take the cost and divide it by the number of ounces. So in the case of Tony the Tiger's favorite breakfast cereal at Walmart, you'd divide $3.78 by 13.5 to get $0.28 per ounce. Dollar General's $3.75 divided by 10.9 ounces gives you $0.34 per ounce.

I have friends who are hardcore bargain hunters and use spreadsheets to track prices. If you're a spreadsheet fan, you can use the formula "=A2/B2" where A2 is the cell with the price and B2 is the number of ounces. However, It doesn't need to be that complicated. Personally, while a frugal corner of my heart cheers on my price-tracking friends, I don't have the energy to maintain a complicated spreadsheet.

That said, I do regularly check prices online before I go shopping, and I will sometimes do a quick price comparison from my cellphone when I'm out. Since many retailers have online stores, it's relatively easy to do a quick price check, especially for big ticket items. The trick is finding a method that works for you and having a sense of what things should cost. That way you'll know when a retailer is playing with package sizes rather than offering you a bargain price.