J.H.
Well I'm super thrifty...and with the first-hand knowledge that the "dollar store" is my daughter's FAVORITE shopping mecca...I actually shop there a lot for gifts for little friends and even the little cousins.
The art supplies there work just as good as the more expensive ones. And there are tons of coloring books...and I've even found some great board books....other stuff like stickers, crayons, drawing paper...all down the "craft" aisle. You can spend less than $10 there and get a whole bag of stuff.
Now I know the stuff can be cheap there...but I've found the crayons, colored pencils, color books, reading books, notepads...really no different...and you look like you spent big when you come with a whole bag of presents...
I'll cringe when the day comes that my daughters NEW Favorite store is the Gap or something like that!