We compared beauty bargains at Dollar General and CVS — and the dollar store came out on top

• As the beauty market grows, retailers from Dollar General to Hudson's Bay are developing their own private-label brands in an effort to compete with drugstore brands featured at stores like CVS.
• These new beauty collections help traditional retailers stay competitive amid shifting consumer demand and rising competition from trendy direct-to-consumer brands like Glossier.
• We shopped the beauty counters at Dollar General and CVS to see how they compared and found Dollar General to be the surprising winner.
• Visit Business Insider's homepage for more stories.

As the beauty industry continues to grow, everybody from Lady Gaga to Dollar General wants a piece of the private-label cosmetics pie. 

In April, Dollar General launched its first private-label cosmetics line, Believe Beauty, in an effort to capitalize on the beauty boom. The 140-piece collection was developed in partnership with Masea, the same company that worked with Target on its Kristin Ess hair care collection and with Walmart on the Flower by Drew Barrymore line, according to Drug Store News.

Dollar General has proven itself a retail anomaly in recent years as it thrives while its industry peers falter. The company plans to open a total of 975 additional stores by the end of 2019, coming on the heels of 29 consecutive quarters of sales growth. 

Read more: Dollar General is dominating in America. Here's hot it keeps its prices so low. 

The debut of Believe Beauty reflects Dollar General's overall growth and willingness to experiment, taking a cue from retailers like Amazon, Hudson's Bay, and QVC, who have all forayed into the private-label beauty category. 

Meanwhile, CVS has long offered a vast assortment of beauty products from an array of brands and at various price points. However, as the cosmetics market grows — thanks in part to the rise of direct-to-consumer companies like Glossier and the proliferation of trends like K-beauty in the US — drugstores are struggling to stay competitive in beauty. 

We shopped at Dollar General and CVS stores in New York City and saw that while Dollar General needs to keep up with the demand for Believe Beauty, it's finding its place in the bargain beauty space:

Our first stop was Dollar General in Bushwick, Brooklyn.

Dollar General currently has 15,597 physical retail stores and is one of the largest discount stores in the US. 

Source: Dollar General 

The beauty and personal-care area was very prominent when we first walked in, as well as one of the most well-lit and organized sections.

As we got closer, we spotted the Believe Beauty section.

The Believe Beauty collection features everything from lipsticks and pencils to foundation and eye shadow paletes, all for no more than $5.

"The formulas in this line are the equivalent of those that would cost up to $19," Scott Oshry, Maesa's chief marketing officer, told Drug Store News.

However, upon closer inspection it looked like several of the most popular items were completely sold out, including the velvet matte liquid lipstick.

Several of the skincare products were also completely gone, including the foundation, highlighting stick, and tinted moisturizer.

However, there were still plenty of mascaras available for purchase, retailing for $2.99.

There were also several eye shadow palettes, which included a mix of colorful hues and neutral tones. Despite the low cost, the packaging still looked chic and high-quality.

We also found a few remaining bronzing powders and contour palettes.

Dollar General also had a select assortment of name-brand cosmetics like Maybelline and CoverGirl at discounted prices.

Next, we visited a CVS store in Manhattan's Financial District.

CVS currently holds the title of largest pharmacy chain in the US.

Source: Business Insider

The beauty aisle was tucked away in the back, though we found a few standalone displays scattered along the way, like this one for Physicians Formula products ...

... as well as this display for Wet n Wild.

CVS carries a significant amount of mass-market name brands, including Neutrogena and L'Oreal.

However, many of these mass-market displays appeared overstocked and marked with discounts.

In an effort to push its e-commerce business (and perhaps to get rid of excess product) CVS announced earlier this month it would give away bags of free beauty products to online shoppers who spent $30 or more. 

Source: Allure

In an attempt to diversify its product assortment, CVS has recently added a few specialty brands like Jouviance and La Roche-Posay, which retails for slightly higher than the mass-market brands.

Toward the front we also found this display for Bliss products, which featured trendier items like this holographic foil sheet mask.

"Many women have shifted to higher-end and niche brands, and increasingly buy beauty products from online startups or outlets like Sephora and Ulta Beauty," reporter Sharon Terlep wrote in a recent article for The Wall Street Journal. "Fighting back, CVS and Walgreens have looked to expand their selection while paring mass-market beauty names."

Ultimately, while the CVS displays were better stocked, they seemed pretty untouched and the packaging was fairly standard and unimaginative compared to Dollar General.

The evolution of drugstore beauty remains to be seen for now, as CVS turns its focus to building out new health initiatives following its acquisition of Aetna in November 2018, and to renovating select stores. 

Source: Business Insider