Party City went belly up. Dollar stores are ready to scoop up its shoppers.
Tyler Sizemore/Albany Times Union via Getty Images
- The collapse of Party City is giving dollar store chains a welcome lift.
- Even with concerns about tariffs and inflation, retail earnings have shown shoppers continue to spend on celebrations.
- Dollar Tree, Five Below, and Dollar General each reported good sales of party supplies.
Call it retail's circle of life.
As in nature, the demise of one creature can unlock resources that benefit others in the ecosystem.
Most recently, the collapse of Party City has been giving dollar store chains a welcome lift, especially as the economy heads into a period of uncertainty.
"There's been a lot of competitors closing, many not in our space directly, but some that were like, for instance, with Party City moving out," Dollar General CEO Ted Vasos said on an earnings call earlier this month.
"We went in and rebalanced the inventory in our p0pshelf stores, bringing in more party, more occasions, more toys, things that will go directly for that consumer that is probably left looking for a place to shop," he added.
Five Below CEO Winnie Park also said this month that her chain was dedicated to "help our customers play, live, give, and celebrate."
"We also help our customers celebrate milestones like graduations and micro and macro holidays from Valentine's to New Year's Eve and everything in between," she said.
Dollar Tree interim CEO Michael Creedon echoed the idea on an earnings call Wednesday.
"The holidays are what drives Dollar Tree. I don't care what your income is, there's no better place to celebrate the holidays, or celebrate in general than Dollar Tree," he said. "No one should go anywhere else because we offer the best value, we've got the convenience."
Earnings from other companies such as Target and Walmart in recent quarters have shown that even with concerns about inflation, shoppers continue to spend to celebrate special occasions.
With tariff uncertainty in the mix, parents may start deal-hunting for lower prices for their kid's birthday party.