Dollar-Stores Merger Shows That Cheap Is Still Chic

Dollar Tree Inc., in agreeing to acquire Family Dollar Stores Inc. for about $8.5 billion, is capitalizing on Americans’ lingering thriftiness following the worst economic slump since the Great Depression.

Sales at dollar stores, which specialize in cheap household goods, surged during the recession because they provided bargains without requiring a long drive, letting Americans save time and spend less on gasoline. While dollar-store revenue growth has slowed since the economy began improving, the chains are still outpacing bigger discount retailers such as Wal-Mart Stores Inc. and Target Corp.