MINNEAPOLIS Dollar stores, once considered dusty, out-of-the-way haunts, are one of the few niches of retail continuing to expand in a dim economy.

The dollar store industry's four top players, including Matthews-based Family Dollar, are no longer snubbed by developers, landlords, investors and consumers because of their perceived working-class customer.

Publicly traded Dollar General, Dollar Tree, Family Dollar and 99 Cents Only Stores are expanding rapidly - so much so, a recent report by Colliers International found, that there are more dollar stores nationwide than drugstores.

Dollar stores have grown into a $56 billion industry, a 43 percent rise since 1998, according to the industry research firm IBISWorld.

The stores are opening hundreds of new locations. Family Dollar plans to open as many as 500 this year.

Dollar General recently announced that it would open 625 more stores this year - almost two a day - across the country, said Tawn Earnest, spokeswoman for the Tennessee-based chain. Dollar General is the largest chain nationally with more than 9,800 stores.

Dollar stores have responded to the new value-obsessed consumer by providing a brighter, cleaner retail experience with a dependable, well-edited selection of goods, including many food items.

All the expansion is a fortuitous development for commercial real estate brokers. As national retailers such as Borders, Linens 'n Things, Ultimate Electronics and others shut their doors, landlords have struggled to fill empty space in their shopping centers. Dollar stores often fill the void.

When looking for new space, the chains emphasize convenience. Typically, they rely on automobile counts on nearby roads as a way of winnowing down potential sites, according to the Colliers report, while other retailers fervently study a potential market's demographics. In competitive markets, the success of a dollar store often depends on storefront visibility and the impulse shopping urge that it encourages.

"Dollar store success depends on the power of the spontaneous purchase," said Andrea Christenson, vice president at Cassidy Turley, a Minneapolis-based real estate firm. "You may not need anything going in, but you develop a need once you're inside."

Historically, Dollar General has opened in rural areas that were so sparsely populated that even Wal-Mart passed. Today, 70 percent of the stores serve communities with fewer than 20,000 residents, according to its annual report. Customers typically live within three to five miles of the store - within a 10-minute drive - and they shop in the store an average of 10 minutes.

Earnest said customers "demand convenience and low prices. We're positioned well against drugstores because they have higher prices, and against big boxes," which are so big they're overwhelming to some shoppers.

Virginia-based Dollar Tree, where every item is indeed a dollar, prefers opening new stores in strip shopping centers anchored by mass merchandisers like Target or Walmart.

Jamie Cohen, a broker with Upland Real Estate in Minneapolis who counts Dollar Tree as a client, says his experience shows that discounters prefer having a dollar store nearby because they add to consumer traffic.

Family Dollar targets low- and middle-income consumers at its 7,100 stores nationwide. About 54 percent of the firm's customers had annual gross income of less than $40,000, and about 24 percent had a gross income of less than $20,000, according to a securities filing. The typical shopper is a female head-of-household.

Because the chain has an urban orientation, it is forced to focus more on price to combat competition, according to the Colliers report.

As chains expand, there is a danger of oversaturation, often a death knell for many national stores, said Ann Natunewicz, manager of retail research for Colliers. Historically, newer entrants are more vulnerable when consumer sentiment changes, particularly if the economy turns around.

But, she added, "I don't see any change in consumer sentiment regarding dollar stores in the foreseeable future. It's now OK to be a value shopper."