Daiso Is The Dollar Store With A Yen For U.S. Market

What happens when you combine a dollar store with Muji, the Japanese minimalist design darling?

You get Daiso.

With the opening of its latest store in the Las Vegas market, the Japanese retailer Daiso now has more than 80 locations in the American market, but more importantly it is bringing an entirely new design and product sensibility to the sector.

Japanese-based Daiso – the name is a mash-up that roughly translates to “big making” — is technically a “100-Yen (87 cents at current exchange rates) store where most everything in the store sells at that price point. The merchandising line-up encompasses literally thousands of skus from apparel to food to home, beauty, kitchen and traditional Japanese paper and craft items. All of it has a classic Japanese design aesthetic, reminiscent of Muji but on a budget, unlike much of what you’d find in traditional U.S. dollar stores where it often seems as if every expense was spared on packaging and design. And if some items are priced higher, the values are impressive, every bit as thrifty as legacy American dollar stores.

Those U.S. chains like Dollar General and Dollar Tree/Family Dollar, each with some 15,000 locations, dwarf Daiso in the American market but worldwide the Japanese retailer has more than 3,600 just in Japan and another 2,300 worldwide in 24 countries and regions. It also began selling online last year in Japan and elsewhere in Asia but is not servicing the North American market, at least not yet. (Shipping is often more than the cost of the merchandise.)

Daiso arrived in this country in 2005 and its current line-up of more than 80 stores is mostly clustered in the western part of the country although it has opened stores in Texas, New York and New Jersey, in addition to one store in Canada. Locations tend to be in neighborhoods with large Asian populations, often in strip mall centers.

If the new Las Vegas store, which opened in December, 2021, is any indication of the retailer’s popularity, there will most certainly be many more Daiso stores to come. Before its 10am opening on a recent weekday morning, at least a dozen shoppers were lined up outside waiting for the doors to open. Once they did, dozens more– many Asian, but also Latin and Anglo individuals, families, teens and the occasional business-suited older male – joined them and by 10:30, the two registers had lines stretching half-way back into the 1,500-square-foot store. They carried baskets of snacks, stationery items, socks, make-up, dishes and assorted other home goods. Most of it was private label, save for the occasional bag of American branded salty snacks, and was still carrying Japanese-language packaging with a sticker in English explaining the contents. Signs in the store offered price conversion charts since many items were not individually priced in U.S. currency. Those signs prominently stated that if there were no price at all on an item, it was $1.50, representing an increase over its home market price tag, but still an amazing bargain.

The store charges 20 cents for a shopping bag and does not accept American Express, though it does take other credit cards. The shoppers that morning were only too glad to pay accordingly.

When Daiso opened its first store in New Jersey in 2019 Forbes senior contributor Joan Verdon noted a similar phenomenon of long lines of enthusiastic shoppers and suggested that while it was still of modest size, Daiso could someday be a serious competitor to existing retailers. “Dollar stores aren’t the only competitors that have to worry. Craft stores and hobby stores should also keep an eye on it.”

Daiso’s American footprint is still relatively small, but when you ask which retailers in the U.S. market have the most upside potential, representing a new merchandising format, Daiso would have to be near or at the top of that list. You can bet at least 87 cents on that.