Five Below simply lacks the cash to compete in a radically changing discount marketplace.

One danger that online retailers such as Amazon.com present to Five Below is that they take away higher-income customers that spend more. Middle- and upper-class shoppers with higher incomes and credit cards are more likely to shop online even for items like groceries and household supplies. That reduces the number of potential customers and, worse, leaves the discount chains to fight over customers with limited amounts of money.